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FM Arun Jaitley promises to chase down culprits to last possible conclusion

After much criticism over his silence on the PNB fraud, Finance Minister Arun Jaitley on Tuesday assured the country that the state would chase down whosoever "cheats the banking system".

twitter-logoBusinessToday.in | February 20, 2018 | Updated 20:55 IST
FM Arun Jaitley promises to chase down culprits to last possible conclusion

After much criticism over his silence on the PNB fraud, Finance Minister Arun Jaitley on Tuesday assured the country that the state would chase down whosoever "cheats the banking system". Without naming Punjab National Bank or the alleged kingpin of the scam Nirav Modi, Jaitley said the bank management did not live up to their task as it failed to detect the delinquent. He went on to blame auditors for being unable to detect irregularities and asked supervisory agencies to assess the system requirement to detect such frauds. He said supervisory agencies should ensure that stray cases are nipped in the bud and they are never repeated.

"It is incumbent on us as a state, till the last legitimate capacity of the state, to chase these people (fraudsters) to the last possible conclusion to make sure the country is not cheated," he said addressing the annual meeting of Association of Development Financial Institutions in Asia & Pacific (ADFIAP) here.

On Monday, celebrity jeweller had reportedly written a letter to PNB, saying the erroneous liability which resulted in a media frenzy has jeopardised his ability to repay the dues of the group to the banks. In a letter to the management of the defrauded Punjab National Bank purportedly penned by the billionaire jewellery designer, Modi has requested the bank to permit payment of salaries to 2,200 employees from the balance lying in the current accounts. "I would request you to permit salaries for FIPL (Firestar International Private Ltd) and FDIPL (Firestar Diamond International Private Ltd) to be paid for the 2,200 employees from the balance lying in the current accounts. Our HR head will send you a breakup of the monthly salary," Modi reportedly added in the letter.

Modi accused the bank of jumping the gun. "Even after your complaint was filed, in good faith I wrote to you saying please allow me to sell Firestar Group, or their valuable assets, and recover the dues not just from Firestar Group, but also from the three firms," he wrote. Valuing his domestic business at around Rs 6,500 crore, he said "this could have helped reduce/discharge the debt to the banking system," but quickly added that this is not possible as all his bank accounts have been frozen and assets have been sealed or seized. "In the anxiety to recover your dues immediately, despite my offer, your actions have destroyed my brand and the business and have now restricted your ability to recover all the dues leaving a trail of unpaid debts."

To remind you, last week PNB's managing director Sunil Mehta had mentioned that Modi had written to them promising to repay the money by selling his company Firestar Diamonds but had made it clear that the offer was "vague". According to Mehta, neither was there "any concrete plan to repay so far", nor had Modi come to the bank "personally" to discuss the matter. "We have requested to him to come and give us a written plan and how he is going to make a repayment", he added.

The letter further claims that the amount owed by his companies is "substantially less", under Rs 5,000 crore. "The erroneously cited liability resulted in a media frenzy which led to immediate search and seizure of operations and which, in turn, resulted in Firestar International and Firestar Diamond International effectively ceasing to be going-concerns. This thereby jeopardised our ability to discharge the dues of the group to the banks," he alleges.

With PTI inputs

 

 

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