In the alleged fraud of Rs. 11,400 crores at PNB, involving jewellers Nirav Modi, Mehul Choksi and their companies, the bank has appointed PwC to conduct Audit and bring out the facts of the case.
The Bank has sought a detailed investigation in the matter especially relating to the sales transactions ie., Sales on Return (SOR) basis, where transactions were reversed in subsequent financial years, thus, indicating that there might be fraudulence in the first place. PNB invited five firms which included KPMG, EY, BDO and DELOITTE to take up the investigation that will be multi-jurisdictional in nature. Out of these PwC emerged as the lowest bidder.
What the Auditor will do?
- Will identify money trail and end us of funds availed through LoU.
- Will identify bogus transactions
- Will trace assets of Nirav Modi and his associates which is not disclosed in the Balance Sheets
- Will conduct a probe into the accounts of five Modi group entities viz., Firestar Diamonds, Firestar International, Solar Export, Stellar Diamonds and Diamond R Us.
- Accounts for a period of seven financial years beginning in 2011 will undergo forensic scrutiny, as per the report available.
- The evidence will be provided to the CBI to prove the criminal charges against Modi and his associates.
- Also, PwC will be providing due recommendations, for strengthening the internal processes and risk management systems to prevent a recurrence of such frauds.
- Also PwC has been advised to quantify the actual loss to the Bank.
It may be noted that PNB is looking for evidences to bring Modi under Wilful defaulter category.