India's PNB discloses $145 mln additional exposure in fraud probe - document

Gitanjali Gems

13/03/2018 11:31

By Abhirup Roy
    MUMBAI, March 13 (Reuters) - India's Punjab National Bank
 PNBK.NS  has told police that it has uncovered additional
exposure of about 9.42 billion rupees ($145.2 million) in
connection with a massive alleged fraud, according to a court
filing seen by Reuters.
    In what has been dubbed as the biggest fraud in India's
banking history, PNB, the country's second-biggest state-run
lender, said last month it had been defrauded of about $2
billion by two jewellery groups who raised credit from overseas
banks based on fraudulent guarantees issued in collusion with
rogue PNB staff. 
    In a court filing on Tuesday, police said the Gitanjali
group of companies controlled by jeweller Mehul Choksi allegedly
defrauded PNB of 70.8 billion rupees ($1.09 billion). PNB had
previously pegged its exposure to the Gitanjali companies at
61.38 billion rupees.
    The new disclosure takes PNB's overall exposure in the still
unravelling fraud case to well over the $2 billion mark.
    A lawyer for Gitanjali group's head, Mehul Choksi, said he
was unaware of the new allegations and declined to comment.
Choksi and his nephew Nirav Modi, who is the other main accused
in the case, have both denied any wrongdoing. 
    PNB did not immediately respond to requests for comment. 
    ($1 = 64.8825 Indian rupees)

 (Reporting by Abhirup Roy and Devidutta Tripathy
Editing by Euan Rocha and Alex Richardson)
 ((euan.rocha@tr.com; +91 22 6180 7257; Reuters Messaging:
euan.rocha.reuters.com@reuters.net))