Subhash Shankar Parab, a key accused in the Rs 7,000 crore diamantaire Nirav Modi bank fraud case, was “deported” from Cairo on Tuesday after a long diplomatic and legal process, officials said in New Delhi.
A CBI team had gone to Egypt's capital to bring back 50-year-old Parab, who was allegedly kept in illegal confinement in a Cairo suburb by Modi, the fugitive diamantaire, they said.
The CBI had been chasing Parab, deputy general manager (finance) in Modi's Firestar Diamond and understood to be a key witness to the Letters of Undertaking (LoU) submitted to the Punjab National Bank (PNB) to siphon off over Rs 7,000 crore, they said.
Soon after the scam broke in 2018, Parab was one of the executives who went missing along with Modi's family members and his uncle Mehul Choksi.
The latter found refuge in Antigua and Barbuda, a Carribbean island country, they said.
India had issued an Interpol Red Notice against Parab to track him and bring him back, they said.
India received information that Parab, a crucial link related to LoUs, was kept in illegal confinement by Modi's men.
He was taken from Dubai to Egypt, and India had expressed concerns for his safety, they said.
After a long diplomatic and legal process, the CBI managed to secure “administrative extradition” or deportation of Parab, who could spill the beans on the country's biggest banking scam allegedly perpetrated by Modi and Choksi with a combined loss of Rs 13,000 crore, they said.
The duo is wanted for allegedly siphoning off Rs 13,500 crore of public money from the state-run PNB, using the Letters of Undertaking.
While Modi is in a London prison after repeated denial of bail and is contesting extradition to India, Choksi had taken the citizenship of Antigua and Barbuda in 2017 using the Citizenship by Investment programme even before fleeing India in the first week of January 2018.
The scam came to light subsequently.
The CBI has charged a PNB official Gokulnath Shetty, along with others, with allegedly helping Modi and Choksi to perpetrate the scam by issuing LOUs to their firms, based on which they took loans from banks abroad.
The investigations revealed that messages for fraudulent LoUs were sent to overseas banks by misusing Society for Worldwide Interbank Financial Telecommunications (SWIFT), an international messaging system for banking, and without making their subsequent entries in PNB's internal software ‘Finacle', thus bypassing any scrutiny of such funds in the bank, they said.
An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant a short-term credit to the applicant.
In case of default, the bank issuing the LoU has to pay the liability to the credit-giving bank along with accruing interest.
The companies of Modi and Choksi took loans from banks abroad on the basis of these LoUs but did not repay them, thus transferring the liability on PNB.
It is alleged that senior officials of the PNB, including the then CEO and MD, did not implement the circulars and caution notices issued by the Reserve Bank of India regarding safeguarding of the SWIFT operation and misrepresented the factual position to the apex bank.
Reconciliation of the Core Banking Solutions (CBS) and SWIFT messages was not done despite repeated RBI circulars, caution notices and questionnaires, the CBI has alleged.