Vipul Ambani, the top executive handling finances of celebrity designer Nirav Modi’s firm is among the five officials arrested by the Central Bureau of Investigation on Tuesday evening, a signal that the government’s crackdown on the firms that pulled off one of the biggest bank frauds in the country would continue full steam.
Nirav Modi’s lawyer Vijay Aggarwal told NDTV that he was shocked at the arrests.
The CBI, which had already arrested five Punjab National Bank officials, has turned its attention to the role of senior executives of the private firms for the massive bank frauds linked to companies run by billionaire designer Nirav Modi and his uncle Mehul Choksi.
Tuesday’s five arrests have been made in two parallel bank fraud cases being investigated by the CBI, one of the half-a-dozen central agencies including the Enforcement Directorate and Income Tax department that are probing the case.
The Enforcement Directorate has already seized diamonds, gold and other assets worth over Rs. 5,600 crore while the tax department has seized the group’s 26 properties in Delhi, Mumbai, Surat and Jaipur.
The three functionaries of Nirav Modi’s firms – Diamond R US, Stellar Diamond, Solar Exports – arrested in the first case are Vipul Ambani, president, finance, at Firestar International, Kavita Mankikar, executive assistant and authorised signatory of the three firms and Arjun Patil, senior executive of the Firestar Group.
In this case, the agency is investigating 150 letters of undertaking issued to Nirav Modi’s companies that let them obtain short-term credit from overseas branches of other Indian banks worth Rs. 6,498 crore.
The remaining two — Kapil Khandelwal, the chief financial officer of Nakshatra group and Gitanjali group, and Niten Shahi, the manager of Gitanjali group — were arrested in connection with the second case registered by the agency on February 15 against Mehul Choksi and his three companies.
The two companies are alleged to have got 143 credit guarantee letters worth Rs. 4,886 crore issued by the Punjab National Bank.
The police have said that two previously arrested bank employees colluded with the billionaire jeweller and his uncle Mehul Choksi to issue fraudulent letters of guarantee, which the businessmen used to raise loans from overseas Indian banks over a seven year period.
Two officers looking after the foreign exchange department of the state-run bank and another who was responsible for checking communications on the SWIFT messaging platform are among the five Punjab National Bank arrested by the CBI. But there have been suggestions that other senior bank officials could also find themselves in trouble, particularly after Finance Minister Arun Jaitley faulted the bank management for gaps in oversight that let the fraud happen.
Around the time Mr Jaitley was speaking on the bank fraud case, a senior executive director-rank official of the state-run bank was already facing tough questions from the CBI. The official is among the 10 bank officials summoned for questioning today by the CBI.
According to news agency Press Trust of India, the analysis of documents recovered from the premises of Modi had led the CBI to a palatial bungalow-cum farmhouse in Alibaugh, a weekend getaway of celebrities in the business world and bollywood from Mumbai where the agency started searches this afternoon.
During the questioning of three PNB officials, Bechhu Tiwari, Yashwant Joshi and Praful Sawant, arrested on Monday, it emerged that they were trying to shift the blame on their colleagues — Gokulnath Shetty (retired official) and Manoj Kharat — arrested earlier, they said. The three officials were presented before a special court in Mumbai which sent them to CBI custody till March 3.