Wednesday, 12 May 2021 05:46 GMT

PNB scam: Nirav Modi's Firestar Diamond files for bankruptcy

(MENAFN - NewsBytes)

PNB scam: Nirav Modi's Firestar Diamond files for bankruptcy
27 Feb 2018

Even as billionaire Nirav Modi battles allegations of committing India's largest bank fraud of Rs. 11,400cr, his international jewelry brand, Firestar Diamond Inc, has filed for bankruptcy in the US.

The company blamed liquidity and supply chain challenges, and said it isn't connected to the complaints filed.

Just yesterday, PNB said its initial estimate of the scam could go up by another Rs. 1,323cr.

How India's biggest scam unfolded

Nirav Modi, diamantaire to global celebrities, and uncle Mehul Choksi, Gitanjali Gems chairman, have been accused of defrauding PNB of Rs. 11,400cr.

Firms linked to them allegedly acquired fraudulent letters of undertaking (LoUs) from PNB during 2011-17 and based on them, obtained loans from foreign branches of Indian banks.

Modi, his family and Choksi left India weeks before the scam was detected last month.

Firestar files for bankruptcy, lists assets and debts worth Rs.648.75cr

Now Firestar has filed for bankruptcy in a New York court, listing assets and debts worth up to Rs. 648.75cr.

The filing includes Firestar's A. Jaffe Inc. wedding jewelry affiliate and Fantasy Inc. affiliate. The number of creditors has been estimated between 50 to 99.

The case is Firestar Diamond Inc., 18-10509 U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Agencies recover documents of another Rs. 5,250cr loan to Gitanjali

Meanwhile, investigative agencies found documents of an unpaid Rs. 5,250cr loan by a 31-bank consortium to Gitanjali.

PNB offered Rs. 587cr, while ICICI, the "lead bank," gave Rs. 405cr. Corporation Bank issued Rs. 297cr, Bank of Baroda Rs. 265cr, and Syndicate Bank Rs. 231cr, among others.

It was cleared in October'16 and the agreement renewed in October'17.

Gitanjali has utilized the 'working capital facility.'

ED to send LRs to six countries seeking assistance

Till now, investigating agencies have seized assets worth over Rs. 6,000cr belonging to Modi and Choksi, including luxury cars and imported watches.

Twelve people, including employees of PNB and Modi and Choksi's firms, have been arrested.

A special court has allowed ED to issue Letters Rogatory to six countries (Hong Kong, USA, UK, UAE, South Africa and Singapore) seeking information on Modi's businesses abroad.


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