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PNB scam: PNB, Allahabad bank asked to divest accused’s powers

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New Delhi: Rajeev Kumar, Secretary, Department of Financial Services (DFS), Ministry of Finance on Monday said that they have instructed the directors of the Punjab National Bank (PNB) and the Allahabad bank to divest all the powers of those who are accused in the multi-crore PNB scam. “PNB board meeting is underway and they will announce the action taken after the meeting,” Kumar told reporters here.

He also added that they have initiated the removal of three board level officers, two ED officers of PNB and one Managing Director of Allahabad Bank.

“PNB Board has decided to divest ED officers to replace them,” Kumar added.


Kumar also said that the Allahabad Bank will call a board meeting and then decide to divest the power of its Managing Director named in Central Bureau of Investigation (CBI) charge sheet.
On a related note, the CBI today submitted a charge-sheet in a Special CBI Court in Maharashtra’s Mumbai city in connection with the multi-crore scam.

For the unversed, the PNB in February detected the multi-crore scam, wherein Diamantaire Nirav Modi and his uncle cum business partner Mehul Choksi had allegedly cheated the bank to the tune of Rs. 114 billion, with the purported involvement of a few employees of the bank.

Earlier on May 3, the Enforcement Directorate (ED) told the Delhi High Court that the affidavits filed by Modi’s uncle and business partner Mehul Choksi’s firm Gitanjali Gems in the court were ‘false and misleading.’ In connection with the pleas filed on the Gitanjali Gems in the court, the ED said, “The Company cleverly veils any reference to Mehul Choksi, who left India in the twilight of the scam coming to the notice of the law enforcement agencies”.

On April 6, the court issued a notice to the ED on a plea of Gitanjali Gems, seeking quashing of a money laundering case against the company.

The scam, which reportedly began in 2011, was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies. The ED had registered the money laundering case against Nirav and others on the basis of a CBI FIR Currently, the probe agencies are investigating the matter and have also seized many properties of Nirav and Choksi.