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A special CBI court in Mumbai has issued an open-ended, non-bailable warrant against Hong Kong-based businessman Jayesh Shah in connection with the ₹13,579 crore Punjab National Bank (PNB) fraud case involving Mehul Choksi’s Gitanjali Group.
The warrant was issued after Shah allegedly refused to return to India and join the investigation despite being contacted by the Central Bureau of Investigation (CBI).
Shah is a partner in Hong Kong-based 4C’s Diamonds Distributors and allegedly managed the firm’s operations.
Why Did the Court Issue the Warrant?
The court observed that Shah had been residing in Hong Kong even before the criminal case was registered.
According to the CBI, investigators contacted him through email on March 3, 2021, and subsequently spoke to him over the telephone, asking him to participate in the investigation. However, Shah allegedly declined to travel to India. A Red Corner Notice was subsequently issued against him.
Allowing the CBI’s application, the court observed that the accused was knowingly staying abroad to avoid prosecution.
Who Else Was Named in the Chargesheet?
Shah was named in a supplementary chargesheet filed by the CBI in July. The chargesheet also included former PNB internal chief auditor Bishnubrata Mishra, Gitanjali Gems import-export manager Ajit Bheda and the company’s senior vice-president Deepan Shah.
Investigators have alleged that the accused participated in financial irregularities involving fraudulent banking instruments.
How Were Fraudulent Bank Guarantees Obtained?
In its July 29 order, the court recorded allegations that the accused conspired with others to secure 118 fraudulent Letters of Undertaking (LoUs) during 2015. These instruments were allegedly issued on behalf of Gili India and Gitanjali Exports Corporation.
The court noted that Gitanjali Exports did not have a sanctioned credit limit with PNB and was subsequently merged with Gitanjali Gems.
What Happened in 2016?
According to the allegations, another 116 fraudulent LoUs were issued during 2016 for various companies. The transactions were allegedly not recorded in PNB’s core banking system, among other violations.
Investigators also alleged that the accused facilitated fraudulent LoUs and amendments to Foreign Letters of Credit, resulting in the misuse of bank funds.
These transactions form part of the wider investigation into alleged irregularities in overseas credit facilities.
What Is the Wider PNB Fraud Case?
The broader Punjab National Bank fraud, estimated at approximately ₹23,000 crore, involves companies linked to Mehul Choksi and his nephew, fugitive diamond trader Nirav Modi.
The CBI’s investigation has examined the alleged misuse of banking facilities and the involvement of individuals associated with the transactions. The latest warrant represents another legal step in the proceedings against an accused residing overseas. The allegations against Shah remain subject to judicial determination.
