NiMo companies initially admitted liability verbally

Mumbai: Enforcement Directorate (ED)’s probe into the Punjab National Bank (PNB) bank fraud case revealed that after the irregularities linked to the alleged fraudulent acquisition of Letters of Undertaking (LoUs) by the companies of the fugitive jewellers Nirav Modi and Mehul Choksi were detected in January this year, the companies’ promoters had verbally confirmed their liabilities to the PNB several times. But allegedly no written confirmation of their liabilities was given to the bank even till a month later, said ED sources.

LoUs are required to raise buyer’s credit from overseas banks. The accused companies also did not allegedly provide documents related to the transactions linked to the LoUs. These facts were revealed in the details provided to the ED by a senior bank official on February 13, according to the agency’s recent chargesheet. “Both the promoters had admitted their liability in their telephonic conversations, as they both were claiming to be staying overseas then with the bank officials,” said the source.

According to the ED probe, three of Modi’s Indian firms had obtained `6,498 crore through fraudulent LoUs issued by PNB’s Mumbai branch. The ED probe was initiated on the basis of a CBI fraud case registered on Febr-uary 16 under sections pertaining to the IPC and the Prevention of Corruption Act. ED has also accused Choksi – controlled firms of cheating the bank to the tune of over `6,000 crore.

Three firms allegedly controlled by Choksi got issued LOUs worth `3,011.39 crore and also got the credit limits of FLCs enhanced to the tune of `3,086.24 crore.

The promoters of the Nirav Modi group and Gitanjalai group had also not submitted any document related to the LoU-linked transactions, making it difficult to verify their authenticity.