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ED Seeks Nirav Modi's Extradition From Hong Kong, UK; More Countries Likely to be Added Today

Various redflags were ignored as PNB probe team found bank manager Gokulnath Shetty sent at least 35 emails to the bank’s treasury division at its Delhi headquarters “outside” normal working hours — from 8 pm to 9.30 am.

Updated:June 26, 2018, 12:31 PM IST
New Delhi: The Enforcement Directorate (ED) has moved a Mumbai special court, seeking absconding jeweller Nirav Modi's extradition from the UK and Hong Kong.

Modi is currently reported to be in Belgium, where he is said to have fled from the UK on June 12.

Confirming that an application was filed before the special court designated under the Prevention of Money Laundering Act (PMLA) on Monday afternoon, Special Public Prosecutor Hiten Venegaonkar, who represented the ED told the Indian Express, “We have sought permission from the court to seek extradition of Nirav Modi, who is an absconding accused in the case. The application seeks for him to be extradited from the UK.”

A senior ED official, however, said the application also mentions Hong Kong. “Also, we have kept our application open-ended. On Tuesday, when it is heard in the court, we may add names of more countries,” he said.

Earlier, the ED has filed a prosecution complaint against Modi and a non-bailable warrant was issued against him. The agency had sent a request Red Corner Notice (RCN) against Modi, but the Interpol is yet to issue this.

Meanwhile, in a report by the Times of India, an internal investigation carried out by Punjab National Bank in the $2 billion fraud involving diamond merchants Nirav Modi and his uncle Mehul Choksi listed major loopholes in the bank’s system, its monitoring and dubious nature of operations at Brady House branch in Mumbai which saw bank manager Gokulnath Shetty clear 13,000 transactions, way above his authorised limit.

Shetty, a key accused in the case who has since retired, managed to remain under the radar despite accusations of side-stepping SOPs, said the report prepared by a four-member team of PNB executives.

During his seven-year stint at the branch, PNB official Shetty went on to clear 13,501 transactions of Rs 1 crore or more. “Further, it was noticed that in 2017, he was also the maker and checker of entries,” the report said. If the daily monitoring system reports were checked by his colleagues, the fraud could have been detected.

This should have created suspicion if he would have checked DMS (daily monitoring system) reports. The junior rank official was given full powers to access the bank’s software and also used to verify large transactions, helping him avoid detection. If someone else had cleared the transactions, an intervention of senior executives could have helped detect the unauthorised transactions, the investigations showed.

The report suggested various redflags were ignored as PNB probe team found Shetty sent at least 35 emails to the bank’s treasury division at its Delhi headquarters “outside” normal working hours — from 8 pm to 9.30 am. Similarly, at least 22 of these emails were sent by him using his personal email ID. “There is one feature common in all these emails as it involves very high- value transactions of accounts of Nirav Modi group only — Diamond R US, Solar Exports and Stellar Exports,” it added.

As a result of massive scale of operations, the Brady House branch witnessed high foreign exchange turnover and transaction vouchers related to various departments were debited and credited in the forex department using Shetty’s ID, who was arrested and chargesheeted by the CBI after the scam came to light at the start of the year.

The alleged irregularities didn’t end there. The probe revealed that even when Shetty remained on leave, his SWIFT password was used by the Brady House branch for authorising payments in international bank branches, which was against the rules. The report also suggested that Shetty enjoyed the patronage of seniors in the bank as he was transferred thrice from the Brady House branch but was never relieved.

His transfer orders were issued after his normal three-year tenure at the branch ended on April 1, 2013, but he continued to serve there. On July 1, 2013, he was transferred to the PNB House branch. Five months later, he was transferred to the Foreshore Road branch but again, he did not move.

On July 1, 2015, a third order was issued to move him to the Opera House branch in Mumbai. Just two days later, he was ordered to be retained at Brady House. In each case, the circle office issued the order and changed it, “without containing any justification”, the report said.

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| Edited by: Sumedha Kirti
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