The CBI has filed a fresh charge sheet against Gokulnath Shetty, the Punjab National Bank Deputy Manager who allegedly helped Nirav Modi and Mehul Choksi perpetrate Rs 13000-crore fraud, and his wife for amassing disproportionate assets worth Rs 2.63 crore, officials said Friday. The agency has charged Shetty and his wife Asha Latha Shetty, a clerk in Indian Bank, under corruption charges for amassing assets worth over Rs 4.28 crore during the period 2011-17 when the scam was being perpetrated at the Brady House branch of PNB in Mumbai where he was posted, they said.
Of the total assets, the CBI alleged they could not provide satisfactory explanation for assets worth Rs 2.63 crore, which were 2.38 times disproportionate to their known sources of income. The CBI looked into the relationship between Shetty and Modi-Choksi during which it dug into the assets amassed by the retired deputy manager, they said.
The agency has registered a separate FIR in November, 2018 against Shetty and his wife to look into their assets. It emerged that against a genuine income of Rs 72.52 lakh during a six-year period, Shetty couple had assets in their as well as family members' names primarily in the form of flats in Mumbai, the CBI alleged.
In its charge sheet filed before a Mumbai special court recently, the agency has said that they had purchased a flat worth Rs 46.62 lakh in Goregaon while paid advance booking amount for three more flats in various localities of Mumbai and neighbouring areas. In addition, the agency also detected fixed deposits, bank balance and recurring accounts of over Rs 75 lakh.
After computing investments, income and expenditure, the CBI concluded that Shetty and his wife allegedly amassed disproportionate assets to the tune of Rs 2.63 crore during 2011-17, they said. The CBI has already filed charge sheets against Modi and Choksi in which role of Shetty, presently in judicial custody, is given, they said.
Shetty, who is alleged to have played a key role in the Rs 13,700-crore loan fraud while working as the deputy manager at PNB's Brady House branch in Mumbai, was arrested in March, 2018. The scam surfaced when the companies owned by Modi and Choksi approached the Brady Road branch in January 2018, after the retirement of Shetty in 2017, seeking renewal of Letter of Undertaking (LoU) for payments to suppliers.
Shetty, the then Deputy Manager at Brady House branch of the PNB, had continued in the same seat for seven years and issued fraudulent LoUs with "impunity", the CBI has alleged. It is alleged that Shetty albeit a junior officer enjoyed clearance level much higher than his post which gave him full powers in Finacle, internal software used by PNB for verifying large transactions.
It is alleged Shetty bypassed PNB's core banking system Finacle and issued LoUs fraudulently, they said. The investigations revealed that messages for fraudulent LoUs were sent to overseas banks by misusing international messaging system for banking called SWIFT platform and without making their subsequent entries in Finacle thus bypassing any scrutiny of such funds in the bank, they said.
An LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant a short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to the credit-giving bank along with accruing interest.
The companies of Modi and Choksi took loans from banks abroad on the basis of these LoUs but did not repay them transferring the liability on PNB. It is alleged that senior officials of the PNB, including the then CEO and MD, did not implement the circulars and caution notices issued by the Reserve Bank of India regarding safeguarding SWIFT operation and misrepresented the factual position to the RBI.
Reconciliation of CBS and SWIFT messages was not done despite repeated RBI circulars caution notices and questionnaires, the CBI has alleged.