PNB fraud: Non-bailable warrants issued against Nirav Modi, Mehul Choksi

New Delhi: A special court for CBI cases in Mumbai has issued non-bailable warrants (NBWs) against billionaire jeweller Nirav Modi and his uncle Mehul Choksi in the Punjab National Bank fraud case.

Officials said that now that a court has issued NBWs the investigating agency can approach the Interpol to get Red Corner notice issued against both Mr Modi and Mr Choksi.

The duo have refused to join investigations into one of the biggest banking scam of the country involving `12,700 crore. The CBI had written on the jewellers’ official e-mail IDs asking them to join the probe but they refused to do so on account of business engagements and health issues.

Earlier, the probe agency had claimed to have traced Mr Modi to Hong Kong and the external affairs ministry had sent a request to that country for his provisional arrest. A provisional arrest is made pending a formal extradition request.

The CBI has also questioned several bank officials who had arranged credit for Mr Modi and Mr Choksi on the basis of forged Letters of Undertaking (LoUs) issued by the PNB’s Brady House branch in Mumbai.

The agency has also summoned an official who handled foreign exchange transactions in the Hong Kong branch of Allahabad Bank.

The LoU are a sort of guarantee given by an issuing bank to other Indian banks having branches abroad to issue a short-term credit to the applicant. In case of default, it is the bank, which has issued the LoU, that pays the liability to the bank extending credit against the LoU.

The CBI has already booked several bank employees in the case. It is alleged that proper records were not maintained in the banking software of the PNB to bypass surveillance. Both Mr Choksi and Mr Modi have been booked in two cases each related to the bank fraud. They fled from the country in the first week of January just few days before the PNB was able to detect the fraud.