Oriental Bank of Commerce (OBC) is the latest public sector lender to join the list of state-run banks which have been defrauded by diamond merchants. Using the same modus operandi like the one used by celebrity jeweller Nirav Modi and his uncle Mehul Choksi to get Letter of Credit (LoC) from PNB, the accused involved in the OBC fraud availed credit facilities to the tune of Rs 389.85 crore with the help of some bank officials.
The CBI has booked Delhi-based diamond jewellery exporter Dwarka Das Seth International Pvt Ltd, six months after the Oriental Bank of Commerce filed a complaint with the agency. CBI has also booked Sabhya Seth, Reeta Seth, Krishna Kumar Singh, Ravi Singh – all directors of the firm – and another company named Dwarka Das Seth SEZ Incorporation for the alleged fraud. The whereabouts of Sabhya, the prime suspect, and other directors is not known for now.
The CBI charged the company and other directors of two firms with cheating OBC in connivance with bank officials and dubious financial instruments. This is similar to the modus operandi of absconding diamantaire Nirav Modi who defrauded Punjab National Bank (PNB) of Rs 11,400 crore.
The accused have availed several credit facilities from the Greater Kailash-II branch of OBC since 2007 by getting Foreign Letters of Credit (FLC), foreign documentary bill purchase and other instruments, said a Times of India report.
The bank found that the company was using Letters of Credit (LoCs) to pay off other creditors against the purchase of gold and other precious stone and transfer gold and funds outside the country using fictitious transactions, the FIR said.
The various credit facilities company had availed from OBC between 2007 and 2012 swelled to Rs 389 crore during the period. The jewellery export firm was also engaging in business transactions with non-existent entities, it said.
After the Rs PNB scam and Rotomac loan default, this is the third biggest corporate scam coming to light in a span of two weeks.