CBI arrests main accused Gokulnath Shetty, ex-DGM of PNB, two others from Mumbai

Gokulnath Shetty was the main official involved in issuance of Letters of Understanding worth Rs 11,400 crore from Punjab National Bank to Nirav Modi and Mehul Choksi.

Gokulnath Shetty

New Delhi: Investigative agency CBI on Saturday morning arrested Gokulnath Shetty (retired DGM of PNB), Manoj Kharat (then single window operator of PNB), Hemant Bhat, Authorised Signatory of the Nirav Modi Group of Firms. They were produced before CBI special court (CR 51) Mumbai this afternoon. Shetty, who retired in May 2017, owns three houses in Mumbai. He was apprehended from the third one in Andheri after continuously shifting his locations to dramatically dodge arrest. His wife and children told CBI sleuths of his whereabouts in Andheri. Shetty was at the forefront in issuing scores of Letter of Understanding by the Punjab National Bank to Indian banks in Mauritius, Bahrain, Hong Kong, Antwerp and Frankfurt for the accused companies of Gitanjali Group promoter Mehul Choksi and diamantaire Nirav Modi. CBI has said that the accused officials issued fraudulent and unauthorised letters of undertakings in favour of foreign branches of different India-based banks. The officials omitted entries of LoUs in the core banking system of the bank issued on behalf of the accused companies to avoid detection, they said, according to news agency PTI. It is alleged that they used SWIFT--global messaging service to move money internationally--and did not make any entries in core banking system, used to process daily transactions, to avoid any scrutiny. Since SWIFT messages to raise credit abroad were not available in the bank's core system, they went undetected, their allegation was quoted by PTI