ICAI begins probe

New Delhi/Mumbai, Feb 23 

The Institute of Chartered Accountants of India (ICAI), a state-controlled regulator for the sector, has said it is probing whether auditors played a role in perpetrating the alleged $1.77 billion fraud that PNB unearthed last week.

The ICAI said on Thursday it has asked the SEBI, PNB and federal investigating agencies to share their findings about the alleged fraud, including anything related to the involvement of any chartered accountants.

The ICAI, which functions under the administrative control of Ministry of Corporate Affairs, said it has set up a committee to study the systemic lapses that contributed to  the fraud and to suggest remedial measures and improvement.

Nirav Modi, his companies, and firms with links to his uncle Choksi, are at the center of the alleged fraud that involved illegally issued letters of undertaking from PNB which were used to get credit from overseas branches of other, mostly Indian banks.

In what has been dubbed the biggest loan fraud in India's banking history, police have so far arrested at least a dozen people —  six from the bank and six more from Modi's and Choksi's companies. — Reuters