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The Serious Fraud Investigation Office (SFIO) has summoned ICICI Bank chief Chanda Kochhar and Axis Bank chief Shikha Sharma to seek information on the Punjab National Bank fraud involving diamantaires Nirav Modi and Mehul Choksi.
SFIO is a multi-disciplinary organisation under the Ministry of Corporate Affairs to investigate white-collar crimes and initiate prosecution. The agency wants to join the dots connecting the irregular issue of letters of undertaking (LoU)/foreign letter of credit (FLC) by a PNBbranch in Mumbai to the companies promoted by Modi and Choksi, and figure out how they had been honoured by Indian banks’ Hong Kong branches to extend working capital to them.
“SFIO has today sought information on the accounts of the Nirav Modi & Gitanjali groups of companies,” Axis Bank said in a statement to the stock exchanges. The bank’s exposure to these entities is about ₹200 crore, it added.
A consortium of 31 banks had extended ₹5,280 crore working capital facility to Choksi’s companies. SFIO sources indicated they may soon summon other banks that are part of the consortium.
ICICI Bank said in a statement that it has no exposure to the Nirav Modi group of companies but noted, “We are working capital lenders to the Gitanjali group of companies along with several other banks in the consortium.” Its exposure to the Gitanjali group, it said, is not the largest among the lenders in the consortium. The bank said it is co-operating with the investigating agencies.
Last week, Punjab National Bank chief Sunil Mehta was called by the Enforcement Directorate and the Central Bureau of Investigation to seek details on the LoU/ FLC fraudulently issued by employees of the bank as part of the probe into the ₹12,600-crore scam.
According to a PTI report, senior Axis Bank officials on Tuesday appeared before the SFIO. A team from Axis Bank, led by deputy managing director V Srinivasan and executives from the trade and transactions department, went to the SFIO office after the agency called them.
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