Indian auditor group begins probe into PNB fraud case

Gitanjali Gems

23/02/2018 06:21

By Nidhi Verma and Devidutta Tripathy 
    NEW DELHI/MUMBAI, Feb 23 (Reuters) - The Institute of 
Chartered Accountants of India (ICAI), a state-controlled 
regulator for the sector, has said it is probing whether 
auditors played a role in perpetrating the alleged $1.77 billion 
fraud that Punjab National Bank  PNBK.NS  unearthed last week.  
    The ICAI said on Thursday it has asked the Securities and 
Exchange Board of India, Punjab National Bank (PNB) and federal 
investigating agencies to share their findings about the alleged 
fraud, including anything related to the involvement of any 
chartered accountants. 
    The ICAI, which functions under the administrative control 
of India's Ministry of Corporate Affairs, said it has set up a 
committee to study the systemic lapses that contributed to  the 
fraud and to suggest remedial measures and improvement. 
    Separately, the Economic Times newspaper reported that PNB 
has tapped PwC to conduct a probe into the alleged fraud that 
would help the bank build a case against jewellers Nirav Modi 
and Mehul Choksi.  
    PNB officials were not immediately reachable for comment, 
while PwC declined to comment on the matter.  
    Modi, his companies, and firms with links to his uncle  
Choksi, are at the center of the alleged fraud that involved 
illegally issued letters of undertaking from PNB which were used 
to get credit from overseas branches of other, mostly Indian 
banks.  
    In what has been dubbed the biggest loan fraud in India's 
banking history, police have so far arrested at least a dozen 
people - six from the bank and six more from Modi's and Choksi's 
companies. 
    A lawyer for Modi has denied his client was involved in any 
fraud. Choksi has not commented but his firm, Gitanjali Gems 
 GTGM.NS , has also denied involvement in the alleged fraud. 
 
 (Reporting by Nidhi Verma and Devidutta Tripathy; Writing by 
Euan Rocha; Editing by Raju Gopalakrishnan) 
 ((euan.rocha@tr.com; +91 22 6180 7257; Reuters Messaging: 
euan.rocha.reuters.com@reuters.net)) 
 
Keywords: PUNJAB NATL BANK FRAUD/