Mumbai: A special Central Bureau of Investigation (CBI) court on Tuesday extended the custody of Gokulnath Shetty, one of the prime accused in Punjab National Bank (PNB) fraud case, till March 17. Shetty was initially arrested in the case registered against Nirav Modi, however, the CBI has taken him into custody in connection with Mehul Choksi’s case too.
Meanwhile, the CBI arrested one more accused Vipul Chitalia on Tuesday. He was remanded in CBI custody till March 15. Chitalia was authorised signatory of the Gitanjali Group and was looking after all the banking transactions.
Special public prosecutor A. Limosin argued before the court that Chitalia was the vice-president (banking operations) of the Gitanjali Group. He was directly reporting to Choksi, chairman and managing director. According to the CBI, Chitalia was instrumental in preparing the applications for putting through the fraudulent transactions of alleged Letters of Understanding (LoUs) and Foreign Letters of Credit (FLC) with the active connivance of Shetty and other accused.
Mr Limosin pointed out to the court that Chitalia was the authorised signatory of the Gitanjali Group of companies for issuance of applications for LoUs and FLCs that is the root cause of the fraud.
According to the CBI, Chitalia is the mastermind of the fraud and he was arrested on airport as a Look Out Circular (LOC) were issued against him.
The CBI has alleged that Shetty, a retired deputy manager of PNB, fraudulently issued 143 LoUs. He unauthorisedly enhanced the value of FLCs in favour of various overseas branches of Indian banks without following prescribed procedure by obtaining required request applications, documents, and approval of the authorities.
Considering the gravity of the crime, Judge S.R. Tamboli remanded Shetty and Chitalia in CBI custody till March 15 and March 17 respectively.
