A week after billionaire jeweller Nirav Modi wrote to Punjab National Bank’s management saying the bank had no option of recovering its dues after going public, the bank on Thursday said it had only done so after pursuing all “lawful avenues available to us”.
In a letter dated February 15, Modi claimed his companies owed the bank much less than the amount made public, and said the bank’s “overzealousness” hampered his ability to clear his dues.
In a stock exchange clarification on Thursday, the bank responded: “We have followed lawful avenues available to us as per [the] law of land to recover our dues.”
Modi is accused of cheating Punjab National Bank of Rs 11,380 crore. The scam involves bank officials allegedly handing out fake Letters of Undertaking on behalf of companies associated with him, which allowed him to access massive foreign exchange loans that were completely unsecured.
In his letter, Modi claimed the bank “destroyed” his brand and business and “restricted” its ability to recover dues by making a public announcement about the matter.
PNB’s General Manager, International Banking Division, Ashwini Vats, meanwhile, wrote seperarely to Modi, saying his companies were getting Letters of Undertaking issued illegally and in violations of the Foreign Exchange Management Act, The Indian Express reported.
“You were getting LoUs issued illegally and in an unauthorised way through a few bank officials,” the letter said, according to the newspaper. “At no stage such facilities were extended by our bank to the three partner firms. When these illegal activities surfaced, they pointed out towards apparent violation of FEMA and money laundering aspect.”
The letter said the bank was “compelled to bring the activities to the notice of Law and Enforcement agencies, which the bank did.” The letter also said Modi’s offers to settle the loans were not supported by “upfront amounts and timelines”.
The bank also sought to address its investors fears about its assets. “We have enough assets/capital to meet any liability which is decided as per law,” it said in the stock exchange filing.
MEA mails passport notice to Nirav Modi
At a press briefing on Thursday, Ministry of External Affairs spokesperson Raveesh Kumar said the ministry has sent the notice about revoking Modi’s passport to an email address provided by the billionaire himself. The ministry has also sent the notice to a physical address in India, Kumar said.
Responding to a question about Modi’s location, Kumar said the ministry was not involved in finding out where Modi is. “There are legal processes that need to be completed in time,” he said, adding that the ministry suspended Modi’s and his uncle Mehul Choksi’s passports on the instructions of the investigating agencies. “They are supposed to reply within a stipulated time. If they do not, we will take further action.”
The ministry said Modi has acknowledged receiving the notice.
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