PNB fraud: Mauritius promises action against entities linked to fraudulent practices

As the alleged Rs 12,600-crore fraud at PNB appears spread across various countries, Mauritius has promised "necessary regulatory action" against all entities found to be linked with any fraudulent practices. The Financial Services Commission (FSC) of Mauritius said in a statement that it has taken cognizance of the media reports about the purported fraud allegations with regards to Punjab National Bank, Nirav Modi and Mehul Choksi.

"The FSC is assessing the reported information and is closely monitoring the matter in collaboration with the Bank of Mauritius, the Mauritius Revenue Authority and the Financial Intelligence Unit. The FSC is also in constant communication with its international counterparts under existing exchange of information agreements," it said. The FSC, regulator of non-banking financial services and global business sectors in Mauritius, said it will take "necessary regulatory action" against any of its licensee, as also individuals or companies under its jurisdiction, "found to be linked with any illegal, harmful and/or fraudulent practices that may cause any prejudice to the good repute of Mauritius".

The alleged loan fraud, said to be perpetrated by billionaire diamantaire Nirav Modi and his associates including Mehul Choksi, came to light last month after state-run Punjab National Bank disclosed it has detected fraudulent issuance of LoUs (Letters of Undertaking) from a Mumbai branch. The fraud is already being probed by multiple agencies in India which are also seeking details from their counterparts in various other countries including Mauritius and Hong Kong about the details of the financial transactions related to the case.

The overseas branches of some Indian banks are said to have credited thousands of crores into the accounts linked to Modi on the basis of the LoUs, which serve as credit guarantees, obtained by Modi and Choksi.