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PNB Fraud: CBI Questions Top Gitanjali Official

Modi, his family and Choksi had left the country in early January

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Punjab National Bank is facing many setbacks from early this year Wikimedia Commons
ED seizes Nirav Modi's valuables. Wikimedia Commons
  • CBI starts interrogating Gitanjali officials
  • The interrogation was due to the PNB fraud
  • PNB is facing many multi-million frauds happening

The CBI on Tuesday began questioning the Vice President of Banking Operations of Mehul Choksi’s Gitanjali Group in connection with its ongoing probe into the multi-crore PNB fraud case, officials said.

Punjab National Bank has face multi-million dollars frauds this year.
Punjab National Bank has face multi-million dollars frauds this year.

“Vipul Chitalia was picked up for questioning,” a Central Bureau of Investigation (CBI) official in Delhi told IANS. He said Chitalia was taken away from the Mumbai airport by the CBI, soon after he landed in the city from Bangkok.

Choksi, along with diamond jeweller Nirav Modi, has been accused of defrauding the Punjab National Bank of Rs 12,600 crore, including Rs 1,300 crore being added to the fraud kitty on February 26.

The CBI had filed the first FIR in the scam on February 14 against Nirav Modi, his wife Ami, brother Nishal, uncle Choksi and his firms Diamond R US, Solar Exports and Stellar Diamond.

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The PNB approached the CBI for a second time against another fraud. Pixabay

Modi, his family and Choksi had left the country in early January. The CBI filed a second FIR on February 15 for a Rs 4,886.72-crore fraud against Choksi’s Gitanjali Group.

Till date, the Enforcement Directorate (ED) has carried out searches at over 198 locations across the country and seized properties worth nearly Rs 6,000 crore, while the CBI has arrested at least 18 persons in the case so far. IANS

Next Story

Chinese Police Catches Hold of $1.5 Billion Money in Online Lending Scandal

The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved.

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Chinese policemen watch as depositors from Ezubao gather outside the State Bureau for Letters and Calls Reception Division office in Beijing, Jan. 1, 2016. China's policy ministry says it investigated 380 online lenders following an avalanche of scandals. VOA

Chinese police have investigated 380 online lenders and frozen $1.5 billion in assets following an avalanche of scandals in the huge but lightly regulated industry, the government announced Monday.

Beijing allowed a private finance industry to flourish in order to supply credit to entrepreneurs and households that aren’t served by the state-run banking system. But that threatens to become a liability for the ruling Communist Party after bankruptcies and fraud cases prompted protests and complaints of official indifference to small investors.

The police ministry said it launched the investigation because person-to-person, or P2P, lending was increasingly risky and rife with complaints about fraud, mismanagement and waste.

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The police ministry said it launched the investigation because person-to-person, or P2P, lending was increasingly risky and rife with complaints about fraud, mismanagement and waste. Pixabay

The ministry gave no details of arrests but said more than 100 executives were being sought by investigators and some had fled abroad. It said authorities seized or froze 10 billion yuan ($1.5 billion) but gave no indication how much might be returned to depositors.

Police say some lenders and investment vehicles were brazenly fraudulent, while others collapsed after inexperienced founders failed to manage risk.

Monday’s statement said P2P lenders were investigated for complaints including wasting money, reporting phony investment plans and using illegal tactics to raise money.

Lending through online platforms grew by triple digits annually until 2017 when regulators tightened controls.

Depositors lent 1.9 trillion yuan ($280 billion) last year, but that was down by 50 percent from 2017, according to the Shenzhen Qiancheng Internet Finance Research Institute.

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The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved. Pixabay

The outstanding loan balance stood at 1.2 trillion yuan ($177 billion) at the end of 2018, down 25 percent from a year earlier, according to Diyi Wangdai, a web site that reports on the industry.

P2P lenders are part of a privately run Chinese finance industry the national bank regulator estimated in 2015 had grown to $1.5 trillion.

The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved.

Many lend to factories and retailers or invest in restaurants, car washes and other businesses. But inexperience and poor risk control means a downturn in business conditions can bankrupt them.

Also Read: Sales of Smart Feature Phones Expected To Be About $28 Billion Over Next Three Years

Finance as a whole has come under tougher scrutiny after a 2015 plunge in stock prices led to accusations of insider trading and other offenses.

In one of China’s biggest financial scams, authorities say depositors lost 50 billion yuan ($7.7 billion) in online lender Ezubo before it was seized by regulators in 2015.

The founder and his brother were sentenced to life in prison in 2017. (VOA)