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PNB faces Sebi wrath over late disclosures

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PTI Photo by Shashank Parade

Regulator warns lender to ensure there is no such slip in future

Mumbai : Punjab National Bank (PNB) said on Thursday that markets regulator Sebi has warned it for delay in disclosures to stock exchanges about the $2 billion fraudulent transactions allegedly carried out by Nirav Modi and Gitanjali Group of companies.

Taking serious note of delay in making disclosures, Sebi has issued a warning letter to state-owned PNB, the country’s second largest lender.


PNB was defrauded of over $2 billion allegedly by diamond trader Nirav Modii and his associates by fraudulent use of Letters of Undertakings (LoUs) and Foreign Letters of Credit (LoC) in connivance with certain bank officials.

“The…non-compliances are viewed seriously and PNB is hereby warned and advised to be cautious in future to ensure compliance with all applicable provisions of the Sebi LODR (Listing Obligations and Disclosure Requirements) Regulations,” Sebi said in a communication to the bank. The Sebi’s warning letter has been posted by the bank on stock exchanges as part of regulatory filing.

Sebi observed that there were delays of 1-6 days by PNB in making disclosures to the stock exchanges pertaining to the filing of reports/complaints with Reserve Bank of India and CBI.

Accordingly, PNB has not complied with various norms.

The Sebi’s communication refers to various disclosures made by PNB to stock exchanges during February and March this year regarding certain fraudulent transactions with respect to Nirav Modi group, Gitanjali group and others and referring of the same to law enforcement agencies. Earlier this week, CBI filed two charge sheets in the Nirav Modi fraud case in a Mumbai court.

PNB Housing pips parent in market cap

New Delhi: PNB Housing Finance is now more valuable than its parent Punjab National Bank which has seen its market capitalisation shrink considerably after being hit by the $2 billion fraud. At the close of trade on Thursday, the market capitalisation (m-cap) of PNB Housing Finance stood at Rs 21,172.29 crore, which was Rs 67.71 crore more than that of PNB’s Rs 21,104.58 crore valuation on BSE. Shares of PNB ended with a gain of 1.19 per cent at Rs 76.45, while those of PNB Housing Finance fell by 0.44 per cent to Rs 1,265 on BSE. The m-cap of PNB Housing Finance was Rs 21,165 crore on Wednesday, while that of PNB was Rs 20,856 crore. PNB had a m-cap of Rs 44,624.67 crore in mid-February before it was hit by the fraud. Shares of PNB were falling for the past two days, plunging 15.5 per cent due to weak show in the fourth quarter earnings. PNB holds 32.96 per cent stake in PNB Housing Finance, as per March quarter shareholding pattern available with BSE. The bank has witnessed deterioration in gross NPAs, which rose to 18.38 per cent of gross advances during March quarter of last fiscal, as against 12.53 per cent a year ago.

ED seizes Rs 85-cr jewellery from Gitanjali group

NEW DELHI: The Enforcement Directorate (ED) on Thursday said it has seized over 34,000 pieces of jewellery worth Rs 85 crore from the Gitanjali Group, owned by diamantaire Mehul Choksi, in connection with the Rs 13,000-crore Punjab National Bank (PNB) fraud case. The agency said the jewellery was “brought from Dubai” and has been seized under the Prevention of Money Laundering Act . “ED seizes over 34,000 pieces of jewellery worth Rs 85 crore under PMLA of Mehul Choksi controlled Gitanjali Group brought from Dubai,” it said. Choksi, along with his nephew and millionaire designer jeweller Nirav Modi, is being investigated by the ED for allegedly defrauding PNB.