Nirav Modi scam: CBI arrests director of Gitanjali group

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The CBI yesterday made four arrests in connection with the alleged Rs 12,636-crore fraud at Punjab National Bank (PNB) perpetrated by billionaire jewellers, Nirav Modi and his uncle Mehul Choksi, officials said.

The agency arrested two employees and an auditor of the Nirav Modi group of companies, while a director of the Gitanjali group of companies owned by Choksi has also been taken into custody, they said. Manish K Bosamiya, the then AGM (operations) of Firestarter International Ltd owned by Modi, and then Finance Manager Miten Anil Pandya were arrested for their alleged role in the preparation of applications for fraudulent Letters of Undertakings (LoUs) submitted to Punjab National Bank.

Auditor Sanjay Rambhia, a partner in the Mumbai-based Chartered Accountancy firm Sampat and Mehta, was also arrested in connection with the ongoing investigation, the officials said.

The CBI also nabbed the then director of Mehul Choksi's company Gili India, Aniyath Shiv Raman Nair. It was alleged that besides being one of the directors of the Gitanjali group of companies, he was the authorised signatory for the applications submitted to PNB for issuance of purported LoUs and Foreign Letters of Credit (FLCs).

An LoU is a guarantee that is given by an issuing bank to Indian banks with branches abroad, to grant a short-term credit to the applicant. It is alleged that Choksi and Modi got issued LoUs and FLCs of Rs 12,636 crore in favour of foreign branches of Indian banks based on fraudulent claims. The accused officials of PNB did not enter the instructions for these LoUs and FLCs in their internal software to avoid scrutiny.

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