Nirav Modi scam: Centre permits CBI to move against Usha Ananthasubramanian

The Centre on August 13 sacked former MD and CEO of Allahabad Bank Usha Ananthasubramanian on the last day of service and granted the CBI permission to prosecute her along with former PNB executive director Sanjiv Sharan in the Rs 14,000-crore Nirav Modi scam, senior Finance Ministry officials said.

In May, Ananthasubramanian, a former CEO of Punjab National Bank along with Sharan were deprived of all powers by their banks after they were named in the CBI charge sheet relating to the PNB scam. Ananthasubramanian was set to retire on Monday but was dismissed.

The Reserve Bank of India(RBI) also sought government sanction for prosecution of Ananthasubramanian and Sharan under the Banking Regulation Act (BRA). “The Centre would soon accede to the RBI’s demand,” the officials said.

“The RBI is empowered to take action under the BRA against them. The government sanction will enable the regulator to file an FIR against these officials under investigation. Prior permission of the government is needed to start proceedings against public servants,” the official added.

The CBI in Mumbai has informed a special court that it had received the sanction to prosecute Ananthasubramanian on charges including criminal conspiracy, cheating, criminal breach of trust and those under sections of the Prevention of Corruption Act. Adhering to CBI’s plea, Special Judge J C Jagdale issued summons to Ananthasubramanian.

Gurdeep Singh, Under Secretary, Ministry of Finance signed the the sanction order that stated: “…after fully and carefully considering the facts of the case and circumstances of the case and after going through the FIR, both the complaints, copies of statements of witnesses recorded by the CBI and other material placed before me and having applied my mind, I am fully satisfied that Usha Ananthasubramanian being a public servant and appointed by the central government should be prosecuted for the offences punishable under section 120B, 420, 409 IPC and 13 (2) read with 13 (1) and (d) of Prevention of Corruption Act, 1988…”

The sanction order also stated that Ananthasubramanian in conspiracy with other accused persons ’caused undue pecuniary loss’ to PNB, and ‘corresponding wrongful gain’ to Gitanjali Gems Ltd, Gili India Ltd and Nakshatra Brands Ltd and the other accused persons ‘without any public interest’.

Sanctions for prosecution have also been received for other PNB officials including Manoj Kharat, the single window operator, Brady House branch; Bechu Tiwari, Chief Manager; Yashwant Joshi, manager; Prafful Sawant, officer; and, Nehal Ahad, General Manager.

A CBI official also stated that the sanction for prosecution against Sharan and another former PNB executive director K V Brahmaji Rao is yet to be received.

While probing the alleged fraud involving businessmen Modi and Mehul Choksi, the CBI had named 25 accused, including Ananthasubramanian and Sharan, and Nirav Modi’s three firms Stellar Diamonds, Solar Exports and Diamond R’ US, in its charge sheet issued in May.

The reason cited for the scam going undetected at PNB was that its SWIFT (Society for Worldwide Interbank Financial Telecommunication) messaging platform was not integrated with the Core Banking Solution (CBS). The PNB officials named in the CBI charge sheet ignored circulars in 2016 regulating the integration of the SWIFT and CBS, a loophole that Nirav Modi took advantage of by providing fake Letter of Undertakings to defraud PNB .

Former deputy manager of PNB’s Brady House branch, Gokulnath Shetty issued fraudulent LoUs for seven years.

Ananthasubramanian’s PNB stint ended in May 2017 after the government sent some of the CEOs of large banks to smaller banks and she was sent to Allahabad Bank.

The CBI, in April, had booked Syndicate Bank MD and CEO Melwyn Rego, deputy managing director of IDBI, along with several others in the Rs 600 crore IDBI loan default case.

Also Read: PNB Fraud: DRT against Nirav to recover Rs 7,000 crore