The CBI arrested Vipul Chitalia, the vice president of Gitanjali Group of Companies, in the USD 2 billion PNB scam, who had escaped to Dubai in the first week of January before the fraud was reported by the public sector bank.
He was detained by the agency at the Mumbai airport when he returned to India, they said, adding that he was questioned at the CBI office here before his arrest.
Chitalia was produced before a special CBI court here in the afternoon. Judge S R Tamboli remanded him in CBI custody till March 17.
In addition to Chitalia, the CBI also took custody of Gokulnath Shetty, a retired deputy manager of the Punjab National Bank, in the FIR pertaining to businessman Mehul Choksi and Gitanjali group.
He was earlier sent to judicial custody in the FIR pertaining to Nirav Modi, they said.
The special court has now remanded him to CBI custody in the Gitanjali case till March 15 for questioning.
Chitalia had left the country for Dubai in the first week of January, as did the prime accused Mehul Choksi and Nirav Modi.
“There was a look-out notice against him, hence the immigration officials detained him at the airport as soon as he arrived from Bangkok,” an agency official said.
Special prosecutor A Limosin told the court that Chitalia reported directly to Choksi.
“Chitalia was instrumental in preparing applications for putting through the fraudulent transactions of the LoUs (Letters of Undertaking) and FLCs (Foreign Letters of Credit) with the active connivance of key accused Gokulnath Shetty,” Limosin told the court.
He was also the authorised signatory of Choksis Gitanjali Group for issuance of applications for LoUs and FLCs, he said.
“He is the mastermind for putting through fraudulent transactions along with Choksi. He was also privy to the modalities for putting through the transactions,” the agency said in the remand plea.
Meanwhile, the CBI questioned four general manager and assistant general manager-ranked PNB treasury officers, they said.
The Rs 12,636-crore fraud was allegedly perpetrated by Modi and his uncle Choksi, the promoter of Gitanjali Gems.
It is alleged that they got LoUs and FLCs of Rs 12,636 crore issued in favour of foreign branches of Indian banks based on fraudulent claims.
The accused PNB officials allegedly did not enter the instructions for these LoUs in their internal software to avoid scrutiny. They were sent through an international messaging system for banking called SWIFT, used to pass instructions among banks globally to transfer funds.
An LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant. In case of default, the bank issuing the LoU has to pay the liability to the credit-giving bank.