Banks seek forensic audit of Gitanjali Gems

Team Udayavani, Feb 28, 2018, 9:50 AM IST

Mumbai: More than two dozen banks have decided to seek a forensic audit to establish if Mehul Choksi-led Gitanjali Gems has indulged in fraud or not, bank officials said on Tuesday.

A consortium of 31 lenders led by ICICI Bank has an over Rs 6,000 crore exposure to the company and appointed TR Chadha & Co to determine if Gitanjali indulged in any financial fraud, sources said.

Results of the audit will help these lenders in deciding on how to treat the account – either as standard or otherwise, they said.

As of now, the Punjab National Bank has flagged its exposure to Gitanjali at under Rs 1,000 crore, a close associate of Nirav Modi-led companies as fraud, they said. The state-run bank has exposure of around Rs 13,000 crore to the three Nirav Modi-held companies in the scam, though.

The Gitanjali account is still a standard one in the books of the lenders but RBI norms on classifying a fraudulent account require a different treatment, they said.

The state-run PNB has the highest exposure to Gitanjali Gems at under Rs 1,000 crore, but ICICI Bank, the second largest with an exposure of over Rs 600 crore is the ‘lead bank’ in the consortium.

In a statement, the largest private sector lender said it has an exposure to Gitanjali, but not to firms promoted by Nirav Modi, who is the alleged kingpin of the nearly Rs 13,000-crore fraud perpetrated at one of the PNB branches in the financial capital.

It said the bank’s exposure to Gitanjali is for working capital and is not the highest among the lenders.