Timeline: Developments in the $2 billion Punjab National Bank fraud case

Gitanjali Gems

08/03/2018 09:46

March 8 (Reuters) - A $2 billion fraud at India's
second-biggest state-run lender Punjab National Bank  PNBK.NS 
has shaken the nation's financial sector, triggering a massive
probe and regulatory changes.
    The following is a timeline of how the case has unfolded:

    Jan. 29, 2018: 
    Punjab National Bank (PNB) files police complaint against
jewellers Nirav Modi, Mehul Choksi and others, saying they had
colluded with two of its staff to defraud the bank of 2.81
billion rupees ($43.16 million
    
    Feb. 5, 2018: 
    Central Bureau of Investigation (CBI) says has launched a
probe into the alleged scam. Bank tells stock exchange it is
still investigating the extent of the fraud.
 urn:newsml:reuters.com:*:nL4N1PV4G5 urn:newsml:reuters.com:*:nFWN1PV0CJ
    
    Feb. 14, 2018: 
    PNB now discloses the amount involved in the fraud as $1.77
billion, adds other banks overseas advanced money to jewellers
based on the fraudulent guarantees issued by its staff
 urn:newsml:reuters.com:*:nL4N1Q426E
    
    Feb. 15, 2018:  
    PNB Chief Executive Sunil Mehta holds news conference, says
working with law enforcement agencies, regulators, other banks
 urn:newsml:reuters.com:*:nL4N1Q52UP
    CBI says Modi, Choksi left India before PNB filed complaint
 urn:newsml:reuters.com:*:nD8N1PZ00O
      
    Feb. 16, 2018:
    CBI files case against Choksi's Gitanjali Group  GTGM.NS ,
conducts searches at 20 of the jewellery retailers locations
 urn:newsml:reuters.com:*:nD8N1PZ00W
    PNB CEO tells analysts bank putting in place better checks
and balances, hopes to recover within six months  urn:newsml:reuters.com:*:nL4N1Q60QN
    Reserve Bank of India, the Indian central bank, says will
take appropriate supervisory action  urn:newsml:reuters.com:*:nI8N1IM018
    State-run Union Bank Of India  UNBK.NS  says it has exposure
of about $300 million related to the PNB incident, while State
Bank of India  SBI.NS  says its exposure is about $212 million
 urn:newsml:reuters.com:*:nFWN1Q51K5  urn:newsml:reuters.com:*:nL4N1Q60QN
        
    Feb. 17, 2018:
    CBI makes first arrests in the case, two PNB employees and
an executive of Nirav Modi's group detained  urn:newsml:reuters.com:*:nL4N1Q703S
    State-run UCO Bank  UCBK.NS  says it has about $412 million
in exposure to fraudulent transactions carried out at PNB
 urn:newsml:reuters.com:*:nL4N1Q807X
    Enforcement Directorate seizes a cumulative 56.74 billion
rupees worth of diamonds, gold and jewellery from Nirav Modi's
home and offices http://bit.ly/2tv1af9
     
    Feb. 19, 2018
    CBI arrests three more PNB executives  urn:newsml:reuters.com:*:nL4N1Q90UP
    
    Feb. 20, 2018
    PNB shares fall for fifth trading session, wiping off $1.9
billion in market capitalisation  urn:newsml:reuters.com:*:nL4N1QA0SH
    Finance Minister Arun Jaitley slams oversight lapses,
without directly referring to PNB case  urn:newsml:reuters.com:*:nL4N1QA13A
    Reserve Bank of India asks banks to implement measures to
strengthen their oversight of the SWIFT interbank messaging
platform
    Jeweller Modi's lawyer denies wrongdoing by client; Modi
writes to PNB saying his companies owe much less than the sums
reported  urn:newsml:reuters.com:*:nL4N1QA0YC
    Enforcement Directorate (ED) says investigating more than
100 shell companies allegedly used by Modi and Choksi to route
funds  urn:newsml:reuters.com:*:nD8N1PZ022
    CBI arrests three officials from Modi's group, two from
Gitanjali  urn:newsml:reuters.com:*:nL4N1QA13A
    
    Feb. 21, 2018: 
    CBI arrests PNB general manager Rajesh Jindal, who headed
the bank's Brady House branch in Mumbai between August 2009 and
May 2011  urn:newsml:reuters.com:*:nL4N1QB0XF
    Jeweller Modi writes to his employees in India saying they
should look for other jobs as he would not be able to pay them
salaries after the seizure of his assets  urn:newsml:reuters.com:*:nL4N1QB2XZ
    
    Feb. 22, 2018:
    ED seizes nine luxury cars belonging to Modi and his firms;
freezes shares and mutual funds worth 78 million rupees held by
Modi and 867.2 million rupees held by Choksi  urn:newsml:reuters.com:*:nL4N1QC2L2
    
    Feb. 23, 2018:
    Auditor group Institute of Chartered Accountants of India
begins probe into PNB fraud  urn:newsml:reuters.com:*:nL2N1QD08B
    RBI orders linking of SWIFT system with banks' core
accounting software by April 30, among other measures, Feb. 20
letter to banks shows  urn:newsml:reuters.com:*:nL4N1QD30B
    Bollywood star Priyanka Chopra announces cutting ties with
Nirav Modi's brand
    
    February 24, 2018: 
    Choksi writes an open letter to employees of Gitanjali Gems
 GTGM.NS  protesting innocence and telling them to look for
other jobs  urn:newsml:reuters.com:*:nL4N1QE0AR
    ED seizes 21 properties including a farmhouse, a solar power
plant and land belonging to Modi worth 5.24 billion rupees
 urn:newsml:reuters.com:*:nL4N1QE09B
        
    Feb. 27, 2018: 
    PNB says the amount of fraudulent transactions has gone up
by about $204 million to $1.97 billion  urn:newsml:reuters.com:*:nL4N1QH22M
    Jeweller Modi's firm Firestar Diamond files for bankruptcy
in the United States  urn:newsml:reuters.com:*:nL4N1QH4GM
    
    Feb. 28, 2018: 
    CBI arrests former PNB auditor M.K. Sharma, who was
responsible for auditing systems and practices of the bank's
Brady House branch  urn:newsml:reuters.com:*:nD8N1QA003
    
    March 1, 2018: 
    PNB appoints BDO India as forensic auditor for five group
companies belonging to Modi  urn:newsml:reuters.com:*:nFWN1QJ0NN
    CBI arrests another former PNB internal auditor, Bishnubrata
Mishra, who was responsible for audits at the branch between
2011 and 2015  urn:newsml:reuters.com:*:nL4N1QJ2AO
    
    March 3, 2018:
    Authorities say gold and diamond bribes given to one PNB
staffer named in fraud  urn:newsml:reuters.com:*:nL4N1QL065
    State-run lender Allahabad Bank  ALBK.NS  says its exposure
to the fraud is about $367 million  urn:newsml:reuters.com:*:nD8N1QH003
    
    March 4, 2018: 
    CBI makes four more arrests - two former employees of Modi's
Firestar International, an auditor of Modi's group and a former
director of one of Choksi's companies  urn:newsml:reuters.com:*:nL4N1QM0GT
    
    March 6, 2018:
    CBI arrests a vice president of Gitanjali group  urn:newsml:reuters.com:*:nL4N1QO42V
    Serious Fraud Investigation Office (SFIO) meets executives
from Axis Bank  AXBK.NS , ICICI Bank  ICBK.NS  over Modi, Choksi
exposure  urn:newsml:reuters.com:*:nL4N1QP2Q0
    
    March 7, 2018:
    PNB CEO Sunil Mehta meets SFIO officials in Mumbai
 urn:newsml:reuters.com:*:nL4N1QP2Q0
    
    March 8, 2018:
    Choksi accuses investigating agencies of gross abuse of due
process in ongoing probe  urn:newsml:reuters.com:*:nL2N1QQ0B9 
    

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Stock performance of PNB, Gitanjali and PSU bank index    http://reut.rs/2D5RRBG
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 (Reporting by Krishna V Kurup in Bengaluru; 
Additional Reporting By Patturaja Murugaboopathy
Editing by Euan Rocha)
 ((Krishna.VKurup@thomsonreuters.com; +91 80 6749 1310; Reuters
Messaging: Krishna.VKurup.thomsonreuters.com@reuters.net;))