Tue, Jan 22, 2019 - Page 10 News List

India sacks executives at Punjab state-owned bank

DIAMOND SCAM:India has issued Interpol red notices against two billionaire diamond traders, with one thought to be in the UK and the other in Antigua

Reuters, NEW DELHI

The logo of Punjab National Bank is displayed on a branch office window in New Delhi, India, on Feb. 27 last year.

Photo: Reuters

India has sacked two executives of state-run Punjab National Bank for allegedly failing to prevent a US$2 billion fraud, two sources said on Sunday, nearly a year after the country’s biggest bank scam came to light and also dragged the Indian government into the controversy.

The firing of the two executive directors, whom the federal police have accused of breaching Indian central bank guidelines, is the first instance of sacking of the bank’s employees since it said that billionaire diamond jeweler Nirav Modi and his uncle had for years fraudulently raised billions of dollars in foreign credit by conspiring with staff at the bank.

Modi and his uncle Mehul Choksi, who left India before the fraud was discovered, have denied the accusations.

In a stock exchange filing late on Friday last week, the country’s second-biggest state bank said that the government had removed K. Veera Brahmaji Rao and Sanjiv Sharan “from the office of executive director” with immediate effect.

The filing did not give a reason.

The government then fired them because “they failed to use global payments network SWIFT to detect the fraud,” a bank source said.

The sources, who had direct knowledge of the matter, declined to be identified because the reasons for the sacking had not been made public.

“They were not able to supervise and there was dereliction of duty on their part,” said one of the sources, a government official.

India has issued non-bailable warrants against Modi and Choksi, while Interpol red notices are out too, but their continued evading of the law is being used by India’s main opposition Congress party to target Indian Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) in the run-up to a general election due by May.

The BJP has said that the fraud began when Congress was in power.

The Indian Directorate of Enforcement, which fights financial crime, has seized assets worth millions of dollars of both jewelers.

A senior Enforcement Directorate investigator last month told reporters that they were confident Modi and Choksi would be brought back to the country “soon.”

He said the Indian embassies in the UK, where Modi is believed to be, and the one in Antigua, where Choksi is, were in constant touch with authorities with information about them.

“We know fear bells have started ringing there,” the investigator said. “We want them to be brought back to India before the elections.”

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