Amid intense investigations following the disclosure of the PNB scam, the Central Bureau of Investigation on late Friday made the first arrests of the case so far. The two relatively junior officials are accused of directing credit to companies linked to billionaire jeweller Nirav Modi and jewellery retailer Gitanjali, led by Modi’s uncle, Mehul Choksi.
The accusations against the two bank employees, Gokulnath Shetty and Manoj Kharat, believed to be at the centre of the fraud were detailed in a police report and also in the bank’s disclosure of the fraud.
A third person, identified as Hemant Bhat was also arrested by the police. He has been described as the “authorised signatory” of the companies tied to Nirav Modi.
A source said that all three are being questioned and will appear in a Mumbai court later on Saturday, adding an “examination of others is continuing.”
The whereabouts of Nirav Modi who fled the country in January are unknown but the TV Station NDTV on Friday reported that he was at a suite in a hotel in New York, citing household staff who answered the door.
A spokeswoman told Reuters on Saturday that the Income Tax Department has also started an inquiry into the billionaire and his group companies, looking into a possible tax evasion and suspected investment of illegal funds. She also added that 29 properties and 105 bank accounts of Nirav Modi and his group companies had been seized.
On Saturday, the Hindu newspaper reported that the Central Vigilance Commission, a body that investigates corruption in the government, has notified senior officials of the Reserve Bank of India and the Finance Ministry to determine how all internal checks and balances failed to detect the fraud. Officials from Punjab National Bank have also been summoned.