TEHRAN, February 16 -India is investigating a $1.77bn fraud case at the state-run Punjab National Bank (PNB), according to government officials.
TEHRAN,Young Journalists Club (YJC) -India is investigating a $1.77bn fraud case at the state-run Punjab National Bank (PNB), according to government officials.
The bank in a statement issued on Wednesday said it had "detected some fraudulent and unauthorised transactions in one of its branch in Mumbai for the benefit of a few select account holders".
PNB has said a few of its executives colluded with perpetrators by illegally issuing "letters of undertaking" to aid Nirav Modi, 47, a billionaire jeweller, and companies linked to him.
Letters of Undertakings or LoUs are a banking instrument issued by a bank providing a form of guarantee or an assurance to meet a liability on customer's behalf.
"Based on these transactions other banks appear to have advanced money to these customers abroad," PNB said in a statement.
The bank officially reported the fraud in a regulatory filing on Wednesday.
Modi and firms linked to him, Solar Exports, Stellar Diamonds and Diamond R US, are now being formally investigated by India's premier investigative agency, the Central Bureau of Investigation (CBI).
According to details published on his official website, Modi, worth $1.73bn, grew up in Belgium's Antwerp, the diamond-cutting capital of the world.
Modi founded Firestar Diamond in 1999 that buys and sells diamonds worth $1.5bn annually.
He has 16 stores in locations such as New York, Hong Kong, London, New Delhi, Mumbai and Macau.
Enforcement Directorate, the Indian government agency that fights financial crime, conducted multiple raids at the offices, showrooms and Mumbai home of Modi on Thursday in connection with the fraud.
Source:Aljazeera
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