Mumbai: The CBI on Tuesday arrested the man alleged to be the ‘mastermind’ of the Rs 12,700 crore Punjab National Bank fraud, dubbed as the biggest fraud in India's banking history.
Vipul Chitalia, vice president (Banking Operations) of Gitanjali Group of companies, was intercepted by the immigration authority at Mumbai airport after he just landed from Bangkok, where he had allegedly been hiding since PNB disclosed the scam on January 29.
Chitalia was handed over to the CBI and produced before a special court, which remanded him to custody till March 17.
The agency told the court that Chitalia was the one who put together the fraudulent transactions along with chairman and managing director of Gitanjali Group, Mehul Choksi. The investigating agency had issued a look out circular against him.
PNB and police have accused two jewellery groups - one controlled by diamond tycoon Nirav Modi and the other by his uncle Mehul Choksi - of colluding with bank employees to get credit from overseas banks using fraudulent guarantees.
According to court filings, the exposure to three companies controlled by Modi has been estimated at Rs 6,498 crore, while firms controlled by Choksi have been accused of defrauding the bank of Rs 6,138 crore.
The CBI counsel pointed out that Chitalia, who directly reported to Choksi, was instrumental in preparing the applications for the fraudulent Letters of Understanding (LOUs) and Foreign Letters of Credit (FLC). The agency said he did this with the active connivance of deputy manager of Punjab National Bank, Gokulnath Shetty, who is an accused in the case, among others.
“He was directly getting the same done through another accused Nitin Shahi who was the assistant finance manager of Gitanjali Group. Chitalia was also the authorised signatory of Gitanjali Group for issuance of application of LOUs/FLCs," the remand read.
The CBI also said that he was privy to modalities for doing these fraudulent transactions.
"Chitalia has been evasive to questions put to him regarding the case as well as to the modus operandi and identity of other conspirators. There is every reason to believe that he along with Choksi is the brain behind the conspiracy," the CBI told the court.
The CBI sought his custody to recover important missing documents related to the LOUs, to identify other accused and to understand the modus operandi apart from unearthing the magnitude of the scam.
According to reports, the value of the scam could rise beyond the Rs 12,700 crore reported by PNB so far. The bank had originally pegged the value at Rs 11,400 crore, but then discovered additional fraudulent transactions worth Rs 1,300 crore. Now, the CBI told the court that this could rise further as all the loan documents have not been recovered so far.
So far, 19 arrests have been made in the case, includinf top executives of Nirav Modi's companies, Gitanjali Group and officials from Punjab National Bank.
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