New Delhi, August 25
The Ministry of Corporate Affairs on Tuesday mentioned Punjab National Bank had obtained over Rs 24 crore as the primary tranche of recoveries from chapter proceedings of three Nirav Modi-promoted corporations within the US.
In 2018, the lender had knowledgeable the Ministry that three corporations promoted by Nirav Modi — Firestar Diamond, Inc; A Jaffee, Inc; and Fantasy, Inc — had filed for Chapter 11 chapter safety within the Southern District of New York, the United States.
The financial institution had additionally requested the Ministry to help and be a part of the chapter proceedings in New York with the intention to assist PNB realise its claims within the debtors’ belongings, the Ministry mentioned in a launch.
According to the discharge, Punjab National Bank has knowledgeable the Ministry, which spearheaded the company governance litigation in a international jurisdictional courtroom, that it had obtained $3.25 million (equal of Rs 24.33 crore) as the primary tranche of recoveries.
“Upon liquidation of the debtors’ assets by the US Chapter 11 Trustee, a sum of $11.04 million (equivalent of Rs 82.66 crore) is available for distribution to unsecured creditors, including PNB. Further recovery therefrom is subject to other expenses and settlement of claims of other claimants,” it added.
Further, the discharge mentioned the “maiden repatriation of $3.25 million is an unprecedented achievement of the Government of India and the Ministry of Corporate Affairs in its fight against corporate fraud in the overseas territory.”
The Ministry additionally has initiated proceedings for disgorgement of monies from the perpetrators — the entities promoted and/or managed by fugitive jewellers Nirav Modi and Mehul Choksi.
In an order dated July 26, the US Bankruptcy Court of Southern District of New York recognised the claims of the financial institution within the proceeds of the sale of belongings of the properties of the debtor corporations.
It additionally authorised the financial institution to difficulty subpoenas to compel the examination of Nirav Modi, Mihir Bhansali and Rakhi Bhansali below oath, the discharge mentioned.
On August 24, 2018, the examiner appointed by the New York Bankruptcy Court submitted his report.
“The report explains the modus operandi of the fraud and the manner in which the US-based employees of the debtors participated in the fraud. One prominent feature of the fraud was the apparent facade of independent companies, which were, in reality, entities promoted and/ or controlled by Nirav Modi, that engaged in ’round-tripping’ of the diamonds amongst themselves,” the discharge mentioned.
Nirav Modi had perpetrated an over $2 billion price monetary rip-off on the Punjab National Bank.
He is lodged in a UK jail after being arrested in London in March 2019 and is at the moment preventing extradition to India.
He was declared a fugitive financial offender by a Mumbai courtroom earlier this 12 months. The courtroom had additionally ordered the confiscation of his belongings. PTI