ED seeks statutory audit reports of banks from RBI

The Enforcement Directorate (ED) has sought statutory audit reports of banks from the Reserve Bank of India (RBI) in connection with the Rs 11,400 crore bank fraud reported by Punjab National Bank last week, according to an ED official who spoke off the record.

The official said that at the moment, all seized assets are being examined and their values are being ascertained with the help of liquidators hired for the purpose. At the time of seizure, the assets’ stock values are being considered.

All top management officials of the state-owned lender have been questioned by the ED, which has also taken on record the statement of whistleblower Hariprasad who had written a letter to the Prime Minister’s Office last year pointing out the fraud in an effort to expose it.

In the investigation so far, around 200 shell companies and benami assets have come under the scanner of investigation agencies. The ED has sought a report on the matter from the income tax department, which is currently looking into it.

According to the ED official, the first letter of understanding (LoU) issued to Nirav Modi’s firm was issued in March 2011, after which the letter was issued every subsequent year.

The money laundering investigator said that it had sought an audit report from 2011 onwards, in addition to the statutory reports sought from the central bank. The ED would be examining other banks’ officials too, in addition to the ones from PNB, in relation with the fraud.

The official also said that so far, as many as 39 locations have been raided in connection with the fraud and assets worth Rs 5,716 crore have been seized.

Ever since the first LoU was issued, the principal amount has never been repaid and the letters just kept getting rolled over to the next year. The official said that the entire process was being conducted from within the bank itself. #casansaar (Source - MoneyControl)