A look back at the scam that left India’s banking system embarrassed and economy poorer by Rs. 13,400 crores, and how the country is getting back.
Antigua has assured India that one half of the fugitive duo, Mehul Choksi will be extradited to India. In a recent development, the Antiguan Prime Minister Gaston Browne told Indian government that fugitive Mehul Choksi, maternal uncle and co-conspirator of the ₹13400 crore PNB scam, will be extradited to India and his citizenship will be revoked.
The only hurdle is that since Choksi is a citizen of Antigua now, he can use his rights and will fight against the extradition in the Antiguan court.
The Antiguan leader has assured India that once he exhausts all his legal options, he will surely be extradited to India.
How the scam exactly took place?
Choksi, along with his nephew Nirav Modi, looted India’s 2nd largest PSU for 7 years running. Nirav Modi was able to fool the PNB for 7 long years with the help of two of its top officials which included Gokulnath Shetty the deputy manager of Brady house branch of PNB.
These officials issued LoUs to Nirav Modi’s companies without any collateral or security. LoUs worth ₹11000 crore were sent from 2011 to 2017.
To cover the scam, these LoUs were not entered in the bank’s core banking solution, which prevented auditors and controllers from recognizing the fraud taking place in the bank.
The PNB contribution to the scam
The first and foremost mistake was from PNB. The Core Banking System and SWIFT are generally linked together. In case of PNB they were not linked and allowed a bank official to send SWIFT messages to lender banks without CBS ever knowing about the fraud. Another blunder from the side of PNB was that their auditors or controllers didn’t checked the Nostro account with such a heavy loan default.
Nirav Modi exploited loopholes in the banking system of PNB and the money which was involved is again of the taxpayers. India has been pursuing the fugitive duo, trying to get them extradited back into legal ambit.
Chances of extradition
Choksi has previously claimed his innocence in an open letter to his employees and told them to look for other jobs. He denies the claims of being a fugitive and has stated he is an Antigua citizen for his business and can’t come to India for trial because of his health issues and cannot afford a 41 hours flight. However, the Bombay High Court has asked for his medical report until the next hearing which is on 10th July.
Timeline of PNB Scam
And for his nephew and the mastermind Nirav Modi, the London court has denied his bail plea four times. “Compelling evidence that applicant and those acting on his behalf have acted to influence witnesses. There is evidence of destruction of evidence. Interference and obstruction may occur,” the judge said on 12 June.
The court has already asked Indian authorities about their prison arrangements for Nirav Modi and it is likely to see Nirav Modi soon extradited to India.