PNB scam: Gokulnath Shetty admits to giving access of LoU issuing software to Nirav Modi's aides
In a latest development in the PNB-Nirav Modi scam, Gokulnath Shetty, former deputy manager of Punjab National Bank, who was arrested by the CBI on Saturday has made some explosive revelations.
According to the investigating agency, Shetty has admitted to have unauthorised access to Level-5 password which is the key for the SWIFT software that is used to issue Letters of Undertaking (LoUs).
(The Level-5 password is of the Assistant General Manager (AGM) level.)
He added that he shared the password with private people, essentially employees and directors of Nirav Modi's company.
PNB's top brass has now got down to cleaning the Augean stables as red flags were raised at a conference call with officials of the Mumbai branch and in decisions long over due, several officials were served suspension notices.
Questions were asked as to why the mandatory three-year transfer was not done for Gokulnath Shetty and others.
The logic that his services as a forex expert were required did not hold water. Shetty's transfer orders came in 2013, bank sources said, but he was not given his relieving orders.
Instead in 2015, the transfer order was cancelled. The officer who cancelled the order has since been suspended, sources said.
Another lapse that has left officails red-faced now is the circular issued in 2017 advising the bank to merge the central banking system with the SWIFT software, but the circular was ignored.
These are issues that the bank will have to respond to to the Central Vigilance Commission (CVC) on Monday. The CVC has summoned the PNB management and Finance Ministry officials to appear before it.
CVC officials said the Managing Director and Chief Executive Officer-PNB Sunil Mehta and the Chief Vigilance Officer (CVO) of PNB have been called along with the Additional Secretary, Department of Financial Services.
The CVO will have to explain why these lapses escaped official vigil.
Ironically, at a conclave of CVOs in Hyderabad in 2016, PNB was awarded for introducing anti-corruption measures and adhering to vigilance guidelines.
On Saturday, the Enforcement Directorate (ED) officers fanned out to 40-odd premises across the country, raiding Gitanjali Gems and Jewels showroom across the country only to discover that half were shut.
ED officials said that the probe is now shifting to Hong Kong and five companies where funds were diverted by Gitanjali Gems and Jewels are under the radar. These companies are Aura Gems, Tricolour Gems, Sunshine Gems and Unity Trading.
ED officials believe that a major chunk of the money was diverted to these companies in a fraudulent manner.
PNB detected a Rs 11,400 crore scam in which jeweller Nirav Modi acquired fraudulent letters of undertaking from one of its branches for overseas credit from other Indian lenders.
The scam was started in 2011 and was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies.
Meanwhile, the PNB filed a second complaint with the CBI on February 13.
The CBI had received the complaint from PNB on January 28 and a case was registered in the case on January 31.
(With inputs from Geeta Mohan)