F Bar Owner, PNB Official Held for Loan Fraud; Used Same Mumbai Branch as Nirav Modi

New Delhi: Four persons including an official of Punjab National Bank Brady house branch in Mumbai whose name figured in the Nirav Modi controversy were arrested in connection with a loan racket, the police said Friday.

The accused were identified as Amarjeet Singh, Ajay Kumar Sharma, Suresh and P K Varun (Assistant General Manager) of PNB, they said.

Police said the accused Singh in connivance with PNB officials got sanctioned a loan to the tune of Rs 7.5 crores to open a luxurious F Bar and Lounge at Delhi's Connaught Place.

After the Nirav Modi incident, the accused Singh left his address and even switched off his phone since his loan was also connected with the same branch as that of Nirav Modi's. In fact, the accused operated the F Bar & Lounge for three years and later closed it without repaying the loans and other liabilities, Suvashis Choudhary, Additional Commissioner of Police (Economic Offences Wing) said.

Nirav Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of over Rs 13,000 crore through fraudulent Letters of Undertaking (LoUs).

Based on a tip-off, a raid was conducted by the Economic Offences Wing of the Delhi Police on September 11, following which the accused Singh was arrested, he said.

During interrogation, it was learnt the accused used to obtain loan on the basis of forged and fabricated sale deeds of the property being offered as collateral security with the banks, he added.

On the basis of fake documents, the accused opened an account at PNB's Mayur Vihar branch in the name of one Sarita with the help of the then Bank Manager Sheetal Garg. The obtained loan of Rs 49.90 lakh was used to set up a temporary factory at Surajpur in Noida, the senior officer said.

Another accused, Sharma, the main player for facilitating sanctioning of loan in connivance with accused Singh opened a dummy company in the name of a 'Ply Mouth Ventures Pvt Ltd' and availed Rs 5 crores cash credit facility in the name of the dummy company, the officer said.

The loans were transferred into other accounts and siphoned off. The accused managed to obtain Rs 2 crore Over Draft (OD) facility from the same bank which was also transferred into another account and misappropriated, the officer added.

These amounts were sanctioned against the collateral security of the properties situated at Delhi which were bogus and never existed, he said.

The account holder never visited Mumbai and the formalities of opening account and equitable mortgage of property was facilitated in Delhi by Varun, the Assistant General Manager of PNB, the officer said.

Varun's son was also involved in the operation of F Bar & Lounge and owned 20% share in the company running the Lounge, Choudhary said.

The bank officials also prepared false site-visit report of the property which never existed.

During investigation, it was learnt a part of the amount to the tune of Rs 7 crore disbursed by PNB Brady House Branch was utilized in the opening of high end luxurious F bar and Lounge, he added.

The bank accounts of the accused persons where the loan amount was disbursed and thereafter siphoned off were identified and have been frozen, he added.