New India Cooperative scam case: Rs 122 crore flagged as missing from vaults existed only on paper

Customers at the New India Co-operative bank in Kandivli West on February 14. Pics/Nimesh Dave

The investigation into the New India Co-Operative (NIC) Bank scam has revealed that the bank's cash vaults in Prabhadevi and Goregaon never actually held the Rs 122 crore flagged as missing by the Reserve Bank of India (RBI). Instead, bank records were allegedly manipulated to show R133.4 crore in cash on hand, even though the capacity of both vaults was only Rs 10 crore each.

Officials have now learned that the cash never made it to the vaults but was siphoned off directly by Hitesh Mehta, the bank's former general manager, allegedly in collusion with senior bank officials, including wanted acting chairman Gauri Bhanu and her husband, former vice-chairman Hiren Bhanu.

(Left) Hitesh Mehta, former GM of New India Co-operative Bank produced in court. File pic

"It appears that the bank falsely reported Rs 133.4 crore in cash as stored in its Prabhadevi and Goregaon vaults. However, during the RBI inspection, Rs 122 crore was found missing. The RBI found only Rs 60 lakh in the Prabhadevi vault and Rs 10.33 crore in the Goregaon vault, despite their total capacity being just Rs 20 crore," an officer privy to the investigation said.

The Economic Offences Wing (EOW) has also suspects that the bank's records and balance sheet were manipulated to show cash reserves that never existed. Surprisingly, the RBI, which has been supervising the bank since 2021, failed to detect this discrepancy until its surprise inspection on February 12, when it discovered that Rs 122 crore was missing. Officials also checked whether the bank had invested the cash or purchased gold, but no such records were found.

The wanted couple

EOW sources suspect that the RBI's sudden inspection may have been triggered by information that the Bhanus had fled the country. Investigation details reveal that two days before the inspection, on February 10, Gauri left for Thailand, while Hiren had already departed for a Gulf nation on January 26. It has also emerged that Hiren surrendered his Indian nationality and has become a British citizen.

The EOW is now examining multiple CCTV cameras of the bank to identify those who accessed the cash vault. During the review, they found a suspicious individual carrying a bag and entering Mehta's cabin. "We have identified the person and are questioning him about the circumstances in which he was seen with the bag while entering Mehta's cabin. We believe he may have played a role in taking away the cash from Mehta," an officer said.

Meanwhile, the EOW is in the process of issuing a blue-corner notice against Gauri and Hiren. The couple have been named in the R122 crore embezzlement case after Mehta, the prime accused, revealed that he had given Rs 26 crore to Hiren and Rs 2 crore to Gauri.

A blue-corner notice, issued through Interpol, helps gather information on a suspect's identity, location, or activities in connection with a criminal investigation. A red-corner notice follows after a charge sheet is filed to seek the location and arrest of persons wanted for prosecution or to serve a sentence.

According to the EOW, the couple owns a flat on Nepean Sea Road but had rented it out and were instead staying in a rented accommodation at Malabar Hill. "Both premises were searched twice, but they were not found at either location," an officer said. The case is being investigated under the supervision of Joint Commissioner Nishith Mishra and DCP Mangesh Shinde, with PI Kishor Pawar as the investigating officer.

The EOW has so far arrested four accused in the case - Mehta, former bank CEO Abhimanyu Bohan and SRA developer Dharmesh Paun, who allegedly received R70 crore but claims he got only R12 crore. The fourth accused is Manohar Arunachalam, son of absconding accused Unnathan Arunachalam, who had allegedly received R40 crore in the scam.

The EOW has recorded statements from six bank directors, who claimed that all decisions were made by the couple without their involvement. The directors who have given their statements are Frederick G D'Sa, Kursu Pesi Paghdiwalla, Milan Anil Kothary, Shiv Satish Kathuria and Viren Pravinbhai Barot.