PNB fraud: PC Jeweller says buys diamonds from local market in cash, not via LoUs

New Delhi: As its shares got hammered in the aftermath of India's biggest bank fraud, PC Jeweller today said the company does not use the letter of credit/letter of undertaking in business transactions and buys all diamonds from local markets on the cash basis only.

The BSE had sought clarifications from the company after its share prices slumped nearly 20 percent to Rs 303 apiece in early trade. The share ended the day at Rs 356.40, down 5.31 percent.

"The company does not use the instruments of LuT/LoC (Letter of Undertakings/ Letter of Credit) etc in its business transactions.

"The company does not have any international transactions in diamonds. It procures all its diamonds from local markets on the cash basis only," PC Jeweller said in its regulatory filing.

It assured investors and shareholders that the fundamentals of the company remain strong and it continues to move ahead as per its laid down business plans.

State-owned Punjab National Bank has detected an Rs 11,400 crore fraud in which billionaire diamantaire Nirav Modi allegedly acquired fraudulent LoUs from one its branches for overseas credit from other Indian lenders. The bank today said it will take all possible action against the wrong-doers.