March 8, 2018 / 9:59 AM / 16 days ago

Timeline: Developments in the $2 billion Punjab National Bank fraud case

(Reuters) - A $2 billion fraud at India’s second-biggest state-run lender Punjab National Bank has shaken the nation’s financial sector, triggering a massive probe and regulatory changes.

People wait in a queue outside a Punjab National Bank ATM in New Delhi, India, February 16, 2018. REUTERS/Saumya Khandelwal/Files

The following is a timeline of how the case has unfolded:

Jan. 29, 2018:

Punjab National Bank (PNB) files police complaint against jewellers Nirav Modi, Mehul Choksi and others, saying they had colluded with two of its staff to defraud the bank of 2.81 billion rupees ($43.16 million

Feb. 5, 2018:

Central Bureau of Investigation (CBI) says has launched a probe into the alleged scam. Bank tells stock exchange it is still investigating the extent of the fraud.

Feb. 14, 2018:

PNB now discloses the amount involved in the fraud as $1.77 billion, adds other banks overseas advanced money to jewellers based on the fraudulent guarantees issued by its staff

Feb. 15, 2018:

PNB Chief Executive Sunil Mehta holds news conference, says working with law enforcement agencies, regulators, other banks

CBI says Modi, Choksi left India before PNB filed complaint

Feb. 16, 2018:

CBI files case against Choksi’s Gitanjali Group, conducts searches at 20 of the jewellery retailers locations

PNB CEO tells analysts bank putting in place better checks and balances, hopes to recover within six months

Reserve Bank of India, the Indian central bank, says will take appropriate supervisory action

State-run Union Bank Of India says it has exposure of about $300 million related to the PNB incident, while State Bank of India says its exposure is about $212 million

Feb. 17, 2018:

CBI makes first arrests in the case, two PNB employees and an executive of Nirav Modi’s group detained

State-run UCO Bank says it has about $412 million in exposure to fraudulent transactions carried out at PNB

Enforcement Directorate seizes a cumulative 56.74 billion rupees worth of diamonds, gold and jewellery from Nirav Modi's home and offices

Feb. 19, 2018

CBI arrests three more PNB executives

Feb. 20, 2018

PNB shares fall for fifth trading session, wiping off $1.9 billion in market capitalisation

Finance Minister Arun Jaitley slams oversight lapses, without directly referring to PNB case

Reserve Bank of India asks banks to implement measures to strengthen their oversight of the SWIFT interbank messaging platform

Jeweller Modi’s lawyer denies wrongdoing by client; Modi writes to PNB saying his companies owe much less than the sums reported

Enforcement Directorate (ED) says investigating more than 100 shell companies allegedly used by Modi and Choksi to route funds

CBI arrests three officials from Modi’s group, two from Gitanjali

Feb. 21, 2018:

CBI arrests PNB general manager Rajesh Jindal, who headed the bank’s Brady House branch in Mumbai between August 2009 and May 2011

Jeweller Modi writes to his employees in India saying they should look for other jobs as he would not be able to pay them salaries after the seizure of his assets

Feb. 22, 2018:

ED seizes nine luxury cars belonging to Modi and his firms; freezes shares and mutual funds worth 78 million rupees held by Modi and 867.2 million rupees held by Choksi

Feb. 23, 2018:

Auditor group Institute of Chartered Accountants of India begins probe into PNB fraud

RBI orders linking of SWIFT system with banks’ core accounting software by April 30, among other measures, Feb. 20 letter to banks shows

Bollywood star Priyanka Chopra announces cutting ties with Nirav Modi’s brand

February 24, 2018:

Choksi writes an open letter to employees of Gitanjali Gems protesting innocence and telling them to look for other jobs

ED seizes 21 properties including a farmhouse, a solar power plant and land belonging to Modi worth 5.24 billion rupees

Feb. 27, 2018:

PNB says the amount of fraudulent transactions has gone up by about $204 million to $1.97 billion

Jeweller Modi’s firm Firestar Diamond files for bankruptcy in the United States

Feb. 28, 2018:

CBI arrests former PNB auditor M.K. Sharma, who was responsible for auditing systems and practices of the bank’s Brady House branch

March 1, 2018:

PNB appoints BDO India as forensic auditor for five group companies belonging to Modi

CBI arrests another former PNB internal auditor, Bishnubrata Mishra, who was responsible for audits at the branch between 2011 and 2015

March 3, 2018:

Authorities say gold and diamond bribes given to one PNB staffer named in fraud

State-run lender Allahabad Bank says its exposure to the fraud is about $367 million

March 4, 2018:

CBI makes four more arrests - two former employees of Modi’s Firestar International, an auditor of Modi’s group and a former director of one of Choksi’s companies

March 6, 2018:

CBI arrests a vice president of Gitanjali group

Serious Fraud Investigation Office (SFIO) meets executives from Axis Bank, ICICI Bank over Modi, Choksi exposure

March 7, 2018:

PNB CEO Sunil Mehta meets SFIO officials in Mumbai

March 8, 2018:

Choksi accuses investigating agencies of gross abuse of due process in ongoing probe

Reporting by Krishna V Kurup in Bengaluru; Additional Reporting By Patturaja Murugaboopathy; Editing by Euan Rocha

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