Moneycontrol
Last Updated : Feb 20, 2018 05:46 PM IST | Source: Moneycontrol.com

PNB earned commission on the buyers' credit given to my firms, claims Nirav Modi

Modi has also requested PNB to permit salaries for FIPL and FDIPL to be paid for the 2,200 employees from the balance lying in the current accounts

Tarun Sharma @talktotarun
Beena Parmar @BeenaParmar

In a fresh twist to the Rs 11,400-crore fraud at Punjab National Bank, Nirav Modi has written a second letter to PNB and other banks claiming PNB had earned commission on the buyers' credit given to his three firms.

Moneycontrol was made aware of the contents of the letter by a source close to Nirav Modi

If true, this could mean that PNB management would have been aware that Letters of Undertakings were being issued  to Nirav Modi and his group firms.

So far, PNB maintained that two of its officials have fraudulently issued these LoUs to Modi group firms against which the firms sought credit from foreign branches of other Indian banks.

In the letter which Moneycontrol has access to, the diamond and jewellery importer, who is being pursued by the CBI and Enforcement Directorate, has also claimed that the liability of his group is "substantially less" and "Moneys have gone through PNB".

"The Buyers Credit Facility has been extended by PNB to the three partnership firms since several years" and "PNB has over the years been earning bank charges to the tune of crores of rupees" and there have been no default on the part of any of these firms over all these years", the letter said.

PNB has not responded to calls and emails sent.

A senior executive of another bank which has exposure to the LoUs said, "We have received the letter but we will not respond to it. He (Modi) is just trying to cover up and make a case for himself. He has not denied that the LoUs were not taken fraudulently."

In the letter, Modi has also claimed the erroneous liability and the resulting media frenzy led to immediate search and seizure of operations, which has in turn resulted in Firestar International Private Limited and Firestar Diamond International Private Limited effectively ceasing to be going concerns. "This has thereby jeopardized our ability to discharge the dues of the group to the banks," the letter said.

Last week, the fraud at India's second largest public sector Bank came to light after the bank told the stock exchanges about issuing the fraudulent LoUs.

In the letter, Modi also alleges that PNB's actions have destroyed his brand and "have now restricted your ability to recover all the dues leaving a trail of unpaid debts".

Modi has also requested PNB to permit salaries for FIPL and FDIPL (FirestarInternational Private Limited and Firestar Diamond International Private Limited) to be paid for the 2,200 employees from the balance lying in the current accounts.
First Published on Feb 19, 2018 10:55 pm
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