PNB Gitanjali

The Enforcement Directorate raids a Nakshatra store in connection with the multi-crore Punjab National Bank scam, in Kolkata Feb. 19. (Kuntal Chakrabarty/IANS photo)

MUMBAI — The recently-revealed Rs. 1,300 crore increase in the Punjab National Bank fraud amount is attributable to Gitanjali Gems, the company owned by Nirav Modi's uncle Mehul Choksi, the bank said in a clarification March 1.

In another clarification, the bank said it had assigned the forensic audit to Binder Dijker Otte India, the Indian arm of a U.S.-based firm, to look into details of five companies involving Modi.

In a note to the stock exchanges, PNB said the latest fraud of Rs. 1,300 crore was committed March 2, 2017.

With this, Gitanjali's fraud goes up to Rs. 6,186.72 crore in the total kitty of Rs. 12,600 crore. The rest of the amount is attributed to the Nirav Modi group.

"Issuance of FLC (Foreign Letters of Credit) is a contingent liability and may fall upon Bank in case of non-payment by opener of FLC. However, we have adequate assets/capital to meet any liability which may be crystallized on us as per law of land," the bank said.

The bank reiterated that the fraud has already been reported to regulatory authorities. "The announcement made to the Exchanges is about possibility of increase in amount of fraud."

Regarding bids for the forensic audit, the bank said that bid from BDO India LLP was Ll and after negotiations with them, the company had been appointed Feb. 2 as the forensic auditor for the five group companies of Nirav Modi.

Headquartered in Belgium, BDO is an international network of public accounting, tax, consulting and business advisory firms that deals with professional services under the name of BDO. BDO has member firms in 162 countries.

The bank also clarified in a tweet March 1 that the Reserve Bank of India had performed risk-based supervisions of the bank on an annual basis.

"There have been reports in a section of media that Reserve Bank of India has not conducted any audit at Punjab National Bank Brady House, Mumbai branch since 2009. It may be clarified that RBI does risk-based supervision of the bank on annual basis," the bank said on Twitter.

In another regulatory filing March 1, PNB’s Ungam Venkata Prabhakar assumed charge as executive director of the bank March 1.

It also added Ram S. Sangapure has demitted the office of executive director Feb. 28, after attaining the age of superannuation. 

PNB shares closed Rs. 101 per share March 1 on the Bombay Stock Exchange, down 0.35 percent from its previous close.

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