PNB fraudulently issued LoUs worth Rs 25k cr: Report

Punjab National Bank (PNB) 'fraudulently issued' Letters of Undertaking (LoUs) worth Rs 25,000 crore to the Nirav Modi group, according to a report by The Indian Express.

A Belgian auditor BDO, who was commissioned by PNB in February 2018 to conduct a forensic audit, found that a total of 1,561 Letters of Undertaking (LoUs) worth Rs 28,000 crore were issued by PNB to the Nirav Modi group. The auditor said that among these, 1,381 LoUs worth Rs 25,000 crore was 'fraudulently issued'.

The auditor also found that 21 of 23 exporters in whose names the LoUs had been issued were 'controlled' by Nirav Modi and subsequently, 193 LoUs worth Rs 6,000 crore were 'mis-utilised’' for making payments to the bank. These findings are based on information until June 2018.

Fugitive diamantaire Nirav Modi is the prime accused in the PNB fraud, which was first revealed in February last year.

The above findings are a part of a 329-page forensic report of BDO that was handed over by a whistleblower to the International Consortium of Investigative Journalists (ICIJ) which has partnered with The Indian Express for a series of reports on the findings of the forensic team.

The audit indicates the full extent of the fraud. The BDO team listed 20 properties owned by Nirav Modi and his family members which have never been used as security for the transactions. Overall, the diamantaire owned 15 charged properties in India which have been valued at Rs 1,300 crore and 13 immovable properties outside India. The forensic report also lists five luxury cars and a boat owned by Nirav Modi along with 106 paintings by M F Husain, Jamini Roy, Jogen Chowdhury and Raja Ravi Varma, which are valued at Rs 20 crore.