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PNB’s overseas operations also under fraud cloud





New Delhi: It’s not just jeweller Nirav Modi and his uncle Mehul Choksi who have run away with Rs 13,000 crore of Punjab National Bank’s money. It now turns out that the fraud-hit bank has been robbed of another Rs 271 crore by a group of businessmen in UK using similar modus operandi.

The UK subsidiary of PNB has filed a case in the British High Court against five Indians, one American and three companies for fraudulently misleading the bank into lending them millions of dollars.

In its suit, PNB (International), which has seven branches in the UK, claimed that the individuals and companies “duped it” into lending them money with “fraudulent misrepresentation in respect of numerous loans” and eventually breached the contract too.


PNB has been in the news recently over the Rs 14,357 crore fraud involving Modi and Choksi. The duo defrauded the bank by raising credit overseas with fake guarantees issued by rogue PNB staff. This alone resulted in the bank’s January-March (FY18) quarter losses soaring to Rs 13,417 crore, the highest in the history of a public sector bank.

The bank’s suit in Britain claims that it advanced loans in dollars from London to four companies registered in the US between 2011 and 2014. The companies — South Eastern Petroleum LLC (SEPL), Pesco Beam USA, Trishe Wind and Trishe Resources — were all operating in the renewable energy sector and the loans were given “to assist in the financing of the construction of a lube oil re-refining unit in South Carolina, and the development and sale of wind energy projects.”

However, as it turned out, the companies seemed uninterested in running power operations but siphoned off the PNB money awarded as loan in a “scheme that was fraudulent from the outset.” These entities also made false claims about their balance sheets and status of projects to secure the loan.

As per PNB records, SEPL, which operates an oil recycling plant in South Carolina, received $17 million in loans in March 2011 with $10 million coming from PNB and $7million from the Bank of Baroda.

In October, PNB gave another $1.5 million to SEPL and in June 2012, both banks advanced a further $3 million. None of these loans have been repaid and SEPL has in fact gone into liquidation now.

The other company being sued is Pesco Beam Environmental Solutions, which specialises in engineered and manufactured systems in oil re-refining. Pesco Beam India is based in Chennai. Pesco Beam has a US subsidiary based in Virginia, which also received loans of $13 million and has not paid the bank back.

The American in this group, Staengl, has also been sued for not adhering to loan repayment cycle. Staengl has claimed that there was no fraud and it was a “legitimate loan.” The business failed due to market conditions.

PNB is also suing Trishe Resources, a wind energy company in the US, and its owners Vathsala Ranganathan, Ramkumar Narasimhan and Ravi Srinivasan, who all live in Chennai. PNB alleged that Trishe Wind borrowed $10m and Trishe Resources $3m and these loans remain unpaid. In 2014, Trishe Wind in the US was declared bankrupt and its assets and liabilities were transferred to Trishe Resources.

Sources said PNB in its suit has claimed all the parties had fraudulently misrepresented that Indian conglomerate Shriram Group was backing their projects.

“The claimants would not have advanced such large sums of money to the defendants had it been informed that these individuals were operating on their own and had no connection with or prospective financial backing from Shriram Group,” PNB’s claim stated.



RBI needs to ensure stability: Shaktikanta Das




New Delhi: The head of the Reserve Bank of India (RBI) said he would take the steps necessary to maintain financial stability in the country and help create favourable conditions for growth.

India’s economy has grown because of measures such as the nationwide goods and services tax and the insolvency and bankruptcy code that prevents wilful defaulters from bidding for stressed assets, Shaktikanta Das said in his address to an investor roundtable.

The country’s growth story is backed by its strong domestic fundamentals, he said, citing lower inflation.


Annual retail inflation rate dropped to an 18-month low of 2.19 per cent in December, strengthening the views of some economists that the central bank could ease monetary policy next month.

India’s top business groups on Thursday urged the central bank to cut its benchmark interest rate by at least half a percentage point and lower the cash reserve ratio it imposes on banks.

The country also needs to watch out for any sudden turbulence in the gloal financial market, Das said.

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Centre removes two PNB executive directors for lapses in Rs 13,500-cr fraud




Chennai:The Central government has removed two Punjab National Bank (PNB) Executive Directors — Sanjiv Sharan and K.Veera Brahmaji Rao — for the lapses in the Rs 13,500 crore fraud allegedly perpetrated by absconding diamantaire Nirav Modi.

The PNB has intimated the action to the stock exchanges.

“We welcome the Central government’s action to dismiss the two Executive Directors. The scam of such proportions could not have happened without the knowledge of the top management,” C.H. Venkatachalam, General Secretary, All India Bank Employees’ Association (AIBEA), told IANS.


“Perhaps for the first time, the Centra has removed the Executive Directors of a nationalised bank under the Nationalised Banks (Management and Miscellaneous Provision) Scheme, 1970. All these days it was said the top management of government-owned banks — Chairman, Managing Director, Executive Directors — are governed only by the contract of appointment.

“It is also good that the central government has followed the due process of giving the two PNB Executive Directors opportunity to put forth their views before dismissing them,” Venkatachalam added.

According to the Central government’s notification, on July 3, 2018, Sharan and Rao were issued a show cause notice as to why they could not be removed from office for having failed to exercise proper control over the functioning of PNB, thus enabling the fraud through the misuse of SWIFT at the bank’s Brady House branch in Mumbai.

After considering Sharan and Rao’s replies and the comments of the bank’s Board, the Centre removed them from office as it found it was expedient in the interests of PNB.

According to the notification, the dismissal of Rao is subject to the outcome of a plea in the Delhi High Court.

“We are happy to see some action being taken. Whether it is only the two Executive Directors and other officials are also involved in the scam has to be probed in full,” Venkatachalam said.

According to him, in the past, low-level officers would have been the scapegoats for such massive scams.

“With the action taken on the top management, people will be satisfied that public sector bank officials are answerable for their lapses,” Venkatachalam added.

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In this new world, data is the new wealth: Ambani




Mumbai: Reliance Industries chairman and managing director Mukesh Ambani urged Prime Minister Narendra Modi to take steps against ‘data colonisation’, specially by global corporations, stating that Indian data must be owned by Indians.

Invoking Mahatma Gandhi’s movement against political colonisation, Ambani said India now needs a new movement against data colonisation.

“Gandhiji led India’s movement against political colonisation. Today, we have to collectively launch a new movement against data colonisation,” he said Gandhinagar at the Vibrant Gujarat Global Summit.


Stressing that, in this new world, data is the new wealth, Ambani said, “India’s data must be controlled and owned by Indian people and not by corporate, especially global corporations.”

He further said, “For India to succeed in this data driven revolution, we will have to migrate the control and ownership of Indian data back to India. In other words, give Indian wealth back to every Indian.”

Stating that the “entire world has come to recognise” Modi “as a man of action”, Ambani said, “Honorable Prime Minister, am sure you will make this one of the principal goals of your digital India mission.”

Later in the day, countering Ambani’s call, Governor – Commonwealth of Kentucky, Matthew Griswold, asked Modi “to think in the opposite” in order to realise the tremendous opportunity that lies in Indo-US partnership.

“Honorable prime minister you have been asked from this stage to think about limiting the amount of competition, limiting the exchange of ideas, information and goods. I would encourage you to think in the opposite,” he said.

While stating that it is important to put the people of India first, Griswold said, “It is also important to put their opportunity and our opportunity as citizens of the world to trade with one another and exchange ideas because iron sharpens iron.”

The greatest possibility comes from the exchange of these idea, he added.

“If we can cut the regulations, cut the bureaucracy, cut the red tape, the opportunity is enormous between our nations,” he added that India is now the 10th largest trading partner for the US and “climbing quickly”.

“The opportunity before us between India and the United States is incredible, but responsibility falls on each of one us, those of us in elected positions, those of you in the industry, those of you who represent various constituencies, we have much work to do…we must do this, ” Griswold said.

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January 2019
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