Moneyback Plan: RBI directs Punjab National Bank to honor LoU claims
The Reserve Bank of India has directed Punjab National BankBSE -3.23 % to pay the entire Rs 11,300 crore owed to counterparty banks in the alleged fraud involving jeweller Nirav Modi, said two bankers aware of the development. Not doing so could lead to turmoil in the financial markets as the trust factor that’s integral to the functioning of the banking industry will be lost, they said. PNB, which is short of funds, has in turn sought the intervention of the government to sort out the mess, they added.
PNB fraud: Rs.5,100 cr. assets seized from Nirav Modi’s firms
The Enforcement Directorate (ED) on Thursday seized diamonds and gold worth Rs.5,100 crore from billionaire Nirav Modi’s firms and carried out searches across five States in connection with alleged fraudulent transactions equivalent to Rs.11,500 crore in the Punjab National Bank. While the businessman’s passport has been revoked by the government, the ED and the Central Bureau of Investigation (CBI) have issued look-out notices against him and his three family members, who flew out of the country last month.
Auditors begin Religare review after RBI red flag
Religare Enterprises’ auditors launched an “extensive review” of the financial services company’s books, after a central bank inspection of a subsidiary found diversion of funds within group firms, including transfer of Rs 525 crore last fiscal year, despite a directive to it against corporate lending. The findings suggested continued weakness of internal controls at the company, and could invite penal action from regulators, auditors SS Kothari Mehta & Co warned. These could also cause a material impairment to the carrying value of Religare Enterprises’ investment in the subsidiary, non-banking finance company Religare Finvest Ltd (RFL), they said.
Price Waterhouse can audit clients till March 2019: SAT
The Securities Appellate Tribunal (SAT) granted partial relief to Price Waterhouse (PW), allowing it to audit existing clients till March 31, 2019, or until a new bench is formed. PW had been barred by the Securities and Exchange Board of India (Sebi) from auditing listed companies in India for two years over its alleged collusion with directors and employees of erstwhile Satyam Computer Services in the country’s biggest corporate accounting scandal.
Retail investors in IPO to get compensation: SEBI
Markets regulator Securities and Exchange Board of India (SEBI) on Thursday said retail investors applying for shares in IPOs would need to be compensated if bankers fail to make the allotment despite their eligibility. Besides, the public issue banker would need to pay an interest amount of 15 per cent to the investors for failing to resolve the grievance within 15 days, while they may also face Sebi’s action for such failures.
Govt asks fraud-hit Punjab National Bank to conduct forensic audits
The government has asked fraud-hit Punjab National Bank (PNB) to conduct a forensic audit and give a detailed report on why the loans given to jeweller Nirav Modi and his associates, based on fraudulent letters of undertaking (LoUs), were not unearthed from 2011 till now. This comes after PNB Chief Executive Officer Sunil Mehta said in a press conference on Thursday the Rs 114 billion ($1.8 billion) fraud started in 2011. Those implicated are Modi, his brother Nishal Modi, wife Ami, and partner Mehul Choksi.
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