CBI pulls up Choksi, Usha in PNB scam

Gitanjali group owner Mehul Choksi and Allahabad Bank CEO Usha Ananthasubramanian along with 13 others were charged by the CBI on Wednesday for alleged cheating and corruption in the diamond scam.

By Our bureau
  • Published 17.05.18
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New Delhi/Mumbai: Gitanjali group owner Mehul Choksi and Allahabad Bank CEO Usha Ananthasubramanian along with 13 others were charged by the CBI on Wednesday for alleged cheating and corruption in the diamond scam.

In addition, three companies of Choksi - Gitanjali Gems, Gili India and Nakshatra Brands - have also been accused in the charge sheet filed before a special CBI court in Mumbai, officials said.

The charge sheet pertains to a second FIR related to alleged crimes of Choksi and his companies in the series of three such cases registered by the Central Bureau of Investigation in the over $2 billion scam case in which the jeweller's nephew Nirav Modi is a prime accused, they said.

The agency has alleged that Rs 7,080.86 crore were siphoned off by Choksi and his companies using 142 letters of undertaking and 58 foreign letters of credit, the officials said. Choksi and Modi are both absconding.

Bank downgraded

Various brokerages downgraded Punjab National Bank (PNB) after the state-run lender suffered a huge loss of Rs 13,416.91 crore for the January-March quarter.

While analysts also cut their target price on the stock, brokerages such as Jefferies said that PNB was in need of an immediate bailout from the government. Its analysts also feel PNB was likely to face significant operational challenges in the near term.

"We believe governance issues, operational challenges, uncertain business prospects and diluted franchise makes it a dud investment proposition. The events of 2017-18 and a weak earnings profile suggest it is on weak terrain. Year 2018-19 could also be a year of losses,'' Edelweiss Securities said in a note. The brokerage downgraded the stock from buy with a revised target price of Rs 70 from the earlier Rs 149. Some of the other houses which downgraded the stock include Nomura, Credit Suisse and Motilal Oswal.

Meanwhile, the PNB share continued to remain weak for the second straight session as it fell by over 12 per cent.

On the BSE, the stock crashed 12.15 per cent to end at Rs 75.55. During intra-day trades, it slumped 13.60 per cent to Rs 74.30 - its 52-week low. On the NSE, the shares plunged 11.92 per cent to settle at Rs 75.70.