In lieu of the ongoing investigations that is being carried out in the Punjab National Bank fraud case, where internationally-acclaimed jeweller Nirav Modi and his associates stand as the key accused, the Central Bureau of Investigation (CBI) on Saturday made their first arrests in connection with the case.
Gokulnath Shetty, a former Deputy Manager at the Punjab National Bank, and Single Window Operator, Manoj Kharat, were arrested for helping Modi conduct fraudulent transactions for over 11,000 crore.
While Shetty, who had been ‘missing’ for a few days, was picked up from his flat in Malad, Mumbai, Kharat was found in his farmhouse in Karjat, Times Now reported.
According to News18, the duo, along with a third – Hemant Bhat, an authorised signatory of the Nirav Modi Group of Firms who was also arrested – were charged in connection with issuing LoUs (Letters of Undertakings) outside of the prescribed protocol, that included obtaining required request applications, documents and approval of authorities.
They did this without making any entries in the bank's systems.
The report added that between Shetty, who retired last year, and Kharat, the duo had managed to fraudulently issue eight LOUs, totalling up to approximately Rs 280.70 crore (for the Hong Kong branches of Allahabad Bank and Axis Bank).
The three arrested will be produced before a special Mumbai CBI court later on Saturday.
Gokulnath Shetty
Shetty had served a seven-year stint at the Brady House Branch of the Punjab National Bank in Mumbai, although as per protocol, reports Economic Times, he was due to have been transferred at least twice during this period.
Shetty was due for transfer some time in 2013. However, considering he was holding a specialist position, the head office may have either not initiated transfer or someone played a role to ensure he was not transferred for another two years.A senior official from the Punjab National Bank told Economic Times
The report adds that Shetty, who had the authorisation to use the SWIFT messaging system for sending LoUs, had reportedly been issuing them without informing the higher authorities, on behalf of Modi and his uncle and associate, Choksi for those seven years.
This could also explain why Shetty, who was due for a transfer on the completion of his five-year term, a standard for managers in specialist positions, in 2015, stayed fixed to his position.
According to the report, Shetty had joined the Punjab National Bank around the second phase of nationalisation and in his 36 years of service, had one taken one promotion, when in 1986, he was promoted from clerk to manager.
Shetty had retired from his position last year, shortly after which news regarding the fraud had first come to light.
Manoj Kharat
Manoj Kharat, a Single Window Operator with the Punjab National Bank had reportedly joined the bank as a clerk in 2014, after receiving a degree in computer science from a Pune University, reports Times of India.
While Kharat has been living in Mumbai for the past couple of years, his family lives in Kajrat, which is a little outside of the city, for the past ten years. His father, Hanumant, is an employee of the Ahmednagar zila parishad's irrigation department, the report adds.
Hanumant told Times of India over a call that he believed his son was innocent in terms of the charges that were pressed against him, and added that the latter was being made a “scapegoat”.
Manoj has been speaking to our family members about the matter over the past few days. He told us that he did not do anything wrong but only carried out whatever instructions were given to him by his seniors.Hanumant Kharat told Times of India
He added that Manoj had told them that as per his role, he wasn’t allowed to deal with any amount beyond Rs 25,000 and was thus in no way connected with the allegations that were being levied against him.
Manoj is in Mumbai and we have asked him to cooperate with the investigating agency for whatever information or knowledge he has about the matter.Hanumant Kharat told Times of India
The Punjab National Bank on Friday suspended eight more of its officials in connection with the fraud, which includes one at the general manager level, reports Times of India. This has raised the count to eighteen employees who were suspended by the bank for their alleged role in the multi-crore fraud case.
(With inputs from News18, Economic Times and Times of India)
(The Quint, in association with BitGiving, has launched a crowdfunding campaign for an 8-month-old who was raped in Delhi on 28 January 2018. The baby girl, who we will refer to as 'Chhutki', was allegedly raped by her 28-year-old cousin when her parents were away. She has been discharged from AIIMS hospital after undergoing three surgeries, but needs more medical treatment in order to heal completely. Her parents hail from a low-income group and have stopped going to work so that they can take care of the baby. You can help cover Chhutki's medical expenses and secure her future. Every little bit counts. Click here to donate.)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)