India’s federal police will soon file fresh charges in the $2 billion Punjab National Bank (PNB) (PNBK.NS) fraud case and detail how the alleged wrongdoing was carried out, according to a source with direct knowledge of the matter.
In the police’s initial charges, billionaire jeweler Nirav Modi, 21 other people, including PNB officials, and three Modi companies were accused of being involved in fraudulent transactions that led to losses of roughly 65 billion rupees ($911 million) for PNB.
Three other Modi employees, a PNB officer, and a relative of Modi’s are now also likely to be charged, said the source, who asked not to be identified as the charges have yet to be made public.
“The investigating officer’s report is in and the chargesheet is ready. It is being reviewed by the head office,” said the source.
India’s Central Bureau of Investigation did not immediately respond to a request for comment.
PNB, India’s second-biggest state-run bank, in 2018 alleged that a few rogue employees had issued fake bank guarantees over several years to help jewelry groups – controlled by Modi and his uncle Mehul Choksi – raise funds in foreign credit. Both have denied any wrongdoing.
Modi was arrested in London in March and is currently fighting extradition to India.
Police filed their first charges in May last year and at the time detailed only some of the alleged fraudulent transactions to Modi and his associates.
The new chargesheet will include 150 transactions and provide details on how fake bank guarantees were used to funnel funds between countries and dummy companies, the source said.
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A separate second chargesheet against Choksi and his associates, is still pending and will take time as police link 142 other transactions to that case, another source told Reuters on condition of anonymity.
PNB has said losses related to Choksi and his associates were more than 70 billion rupees.
PNB and a lawyer for Modi and Choksi did not immediately respond to Reuters’ requests for comment on Thursday.
The first source said that while the employees of Modi would be being charged with facilitating the funneling of funds, Modi’s relative would be charged with destruction of evidence.
After a lull in the CBI’s investigation, the probe has picked up pace in recent months.
Weeks ago, the CBI briefly froze the main bank account of the country’s largest law firm Cyril Amarchand Mangaldas (CAM), alleging funds it received from Modi and his group were a “proceed of crime”, according to court documents seen by Reuters.
A special court in September unfroze the bank account after the firm argued the funds were a legal fee, but maintained a freeze on the amount it received from Modi and his group, the filings show.
The CBI began scrutinizing CAM after more than 24,000 pages of documents related to Modi’s firms were seized from CAM’s premises in Feb. 2018, Reuters reported last year.
CAM terminated its engagement with Modi and his firms while the CBI was seizing documents from the law firm last year, said the firm in a court filing, adding it had “fully cooperated with the CBI” and voluntarily submitted additional related documents to federal agents.
CAM did not respond to requests for comment.
The law firm, which advises numerous large multinationals, also advises Thomson Reuters, which owns Reuters, the company’s news division.
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