CBI registers FIR against Gitanjali group in $1.8 bn fraud case

At the end of September Gitanjali Gems had a net debt of Rs6,874.97 crore

At the end of September Gitanjali Gems had a net debt of Rs6,874.97 crore

Banks are always supposed to cover their LoUs against collaterals, which wasn't allegedly done in this case.

Apart from Shetty, another bank official Manoj Hanument and authorised signatory of Modi-run companies, Hemant Bhatt, have also been arrested by the CBI.

While SBI has a robust risk-management system and a well-recognised internal audit system, Rajneesh Kumar said the banks also keeps personnel in key positions rotating to avoid lender-borrower connivance. The Chief Minister took to Twitter and said that the scam which had started in 2011, is still going on. But as details show, all the LoUs in question are from the past two years.

Modi, 46, has been a regular feature on the lists of rich and famous Indians since 2013.

A few cartoonists took a dig at the ruling government's regular approach to blame its predecessors for the country's current troubles.

In the first instance, a complaint was given on 7 May 2015 to the Ministry of Corporate Affairs by one Vaibhav Khuraniya & R.M. Green Solution Private Limited.

However, a Gitanjali source said that it is believed the new charges are not substantially different from the charges announced last week involving Choksi and Modi, who is his nephew. But no case was registered.

Neither man has made any public statements in recent days, but the company that Choksi runs, Gitanjali Gems, has said Choksi has no connection to numerous firms listed in the $43 million complaint. "UPA tried to cover up the scam".

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Following a press conference held by Congress today, Union Minister Nirmala Sitharaman accused the UPA government of misleading people and covering up the PNB fraud by accusing the BJP.

The complainant also enclosed copies of complaints by franchisee victims against Choksi and various firms linked to him.

It said that Choksi's Geetanjali Gems and its subsidiaries led by Choksi dealt with 32 banks.

How did Nirav Modi and others manage to suck out so much money from the banking system without any collateral? This raised an alarm as PNB officials noticed that someone from their own bank had been issuing LOUs without import bill and mentioning it in CBS.

The total loans in the three firms of Modi, Stellar Diamond, Solar Exports and Diamonds "R Us was 39.929 billion rupees, while total capital of the partners was 4 billion rupees, it said". However, in a statement issued yesterday the central bank denied having given any such instructions. The Punjab National Bank's Mumbai branch disclosed famous jeweller's $ 1.77 billion fraud on 15th February. Past due payments of buyers' credit were paid off using another buyers' credit issued by Allahabad Bank and Axis Bank branches in Hong Kong. A fresh FIR has been filed by the CBI on Friday.

The FIR is against Mehul Choksi, his three organizations, Gitanjali Gems Ltd, Gili India Ltd and Nakshatra Brands Ltd, the executives of these organizations and the two bank workers.

Interpol's help has been sought to seek Nirav and the others.

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