The National Company Law Tribunal (NCLT) has issued orders restraining Nirav Modi, Mehul Choksi and 60-dd entities including various individuals, companies and limited liability partnership firms, from selling their assets so that the government can recover funds siphoned off by them in the Rs 12,600 crore PNB fraud.

The corporate affairs ministry has made a public announcement that the ex-parte order was passed on a petition filed by the ministry under sections of the Companies Act, 2013. The ministry moved the petition under various provisions such as section 221, which pertains to freezing of assets of a company on inquiry and investigation, and section 222 that relates to imposition of restrictions upon securities.

The 64 entities against whom the restraining order has been passed Apart from the main perpetrators of the fraud Nirav Modi and Mehul Choksi, some of their relatives and various companies such as Gitanjali Gems, Gilli India, Nakshatra Brands and Firestar Diamond figure on the last of barred entities.

Partnership firms such as Solar Exports and Stellar Diamond have also been included on the list. According to the ministry, there is an injunction against these entities from removal, transfer or disposal of funds, assets and properties till further orders. The NCLT has posted the matter for further hearing on March 26 when the entities concerned have been asked to be present before the tribunal. As per the public announcement, in case the entities fail to appear on that day, then the matter would be heard ex-parte.

Apart from the CBI and the Enforcement Directorate, the Serious Fraud Investigation Office (SFIO) under the corporate affairs ministry is also investigating the matter. The ministry has ordered the SFIO to investigate around 110 companies, including some listed ones, and about 10 LLPs linked to Modi and Choksi. The estimated Rs 12,636 crore swindle took place through fraudulent Letters of Undertaking (LoUs) in collusion with some employees of PNB who are also being investigated in the case.

Although PNB managing director and chief executive Sunil Mehta had said the bank would honour all bona fide commitments under the LoUs, there are reports about some disputes between PNB and other lenders on repayment. While PNB is trying to make out that the LOUs are fraudulent as they were sent on the SWIFT system without putting it on the core banking server of PNB.

However, other banks such as SBI, Allahabad Bank and UCO Bank and Axis Bank are of the view that any bank guarantee that comes through to them on the SWIFT system from PNB is valid. According to them any short circuiting of norms is an internal problem for PNB. Interestingly, Mehta and a former PNB chief, Usha Ananthasubramanian have also been questioned by the CBI in connection with the mega fraud.

Mauritius starts probe to trace cash

The Mauritius authorities have also swung into action to detect any money that the scamsters in the PNB fraud case may have parked in the island nation. The Financial Services Commission (FSC) of Mauritius said in a statement that it has taken cognisance of media reports about the purported fraud allegations with regards to Punjab National Bank, Nirav Modi and Mehul Choksi.

The FSC is assessing the reported information and is closely monitoring the matter in collaboration with the Bank of Mauritius, the Mauritius Revenue Authority and the Financial Intelligence Unit. The FSC is also in constant communication with its international counterparts under existing exchange of information agreements, the statement said.

The FSC, regulator of nonbanking financial services and global business sectors in Mauritius, said it will take necessary regulatory action against any of its licensee, as also individuals or companies under its jurisdiction, found to be linked with any illegal, harmful and/or fraudulent practices that may cause any prejudice to the good repute of Mauritius.

Indian investigative agencies are also seeking details from their counterparts in various other countries including Mauritius and Hong Kong about the details of the financial transactions related to the case as the money has been siphoned out of overseas branches of Indian banks on the basis of guarantees extended by PNB’s Brady House branch in Mumbai.