TIL Desk/Business/New Delhi/ Punjab National Bank’s managing director and chief executive, Sunil Mehta, admitted the collusion of employees in the letters of undertaking scam while being questioned by the Enforcement Directorate on Thursday, according to sources.
Mehta’s statement was recorded by the probe agency under the Prevention of Money Laundering Act, in connection with the case registered against Nirav Modi and Mehul Choksi in the Rs 127-billion fraud at the government-owned lender.
Mehta was in the ED office at Ballard Pier here for nearly six hours. He was summoned soon after being questioned in the same matter by the Central Bureau of Investigation. According to ED sources, he said the fraud took place due to “systemic failure” and “procedural lapses”, owing to lack of interface or proper links between the core banking software and the SWIFT interbank messaging system.
ED officers questioned Mehta on procedural aspects of the banking system and whether he was aware about the malicious use of the SWIFT infrastructure and also to explain the inefficiency of the system in not generating alerts despite LoUs getting encashed at regular intervals.
The ED underlined its present focus was on operational issues at the bank, not the criminal aspect. “Top bankers were called to gather information about the rationale of the issues. We would decide further action depending on the outcomes,” said an ED official.
