CBI files charge sheet against Choksi & ex-PNB MD in $2 billion scam case

New Delhi: Gitanjali group owner Mehul Choksi and Allahabad Bank CEO Usha Ananthasubramanian along with 13 others were on Wednesday charged by the CBI for alleged cheating and corruption in the issuance of fraudulent letters of undertakings worth Rs 7,080.86 crore from Punjab National Bank in the country's biggest banking scam case.

In addition, three companies of Choksi -- Gitanjali Gems Ltd, Gili India Ltd and Nakshatra Brands Ltd -- have also been made accused in the charge sheet filed before a special CBI court in Mumbai, officials said. The charge sheet pertains to a second FIR related to alleged crimes of Choksi and his companies in the series of three such cases registered by the Central Bureau of Investigation in the over USD 2 billion scam case in which jeweller's nephew Nirav Modi is also an accused, they said.

The agency has alleged Rs 7,080.86 crore were siphoned off by Choksi and his companies using 142 letters of undertaking and 58 foreign letters of credit, the officials said.

Choksi and Modi are both absconding. The agency had on May 14 filed a charge sheet in a related case against diamond merchant Modi pertaining to alleged swindling of Rs 6,498.20 crore using fraudulent LoUs issued from PNB Brady House branch in Mumbai.

The cumulative figure of the funds swindled by Choksi and Modi now stands at Rs 13,579.06 crore from PNB by using fraudulent LoUs, according to the charge sheets, the officials said. An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.

Choksi and his companies allegedly availed credit from overseas branches of Indian banks using the fraudulent guarantees of PNB given through LoUs and letters of credit issued Brady House branch in Mumbai which were not repaid bringing the liability on the state run bank, the officials said. The charge sheet, filed in the Mumbai special court after a three-and-a-month-long probe, alleged that Gokulnath Shetty, a deputy manager in PNB, arrested by the CBI, received Rs 1 crore from the companies of Choksi to issue LoUs to his companies, they said. This quid pro quo pertains specifically to alleged illicit payments made by the companies of Choksi, they said, adding that the probe into the overall picture to establish the total amount alleged received from companies of Modi and Choksi is still underway.

The instructions for transferring the funds were allegedly issued by Shetty using an international messaging system for banking called SWIFT platform and without making their subsequent entries in the PNB's internal banking software.