The central government on Tuesday said that Punjab National Bank (PNB) has informed the Ministry of Corporate Affairs (MCA) that it has received USD 3.25 million (the equivalent of Rs. 24.33 crores) as the first tranche of recoveries in fugitive Nirav Modi case from the USA.
“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,” MCA said in a release.
The Ministry also has initiated proceedings for disgorgement of monies from the perpetrators– the entities promoted and/or controlled by Nirav Modi/Mehul Choksi.
“Punjab National Bank Limited in 2018 informed the MCA that three companies promoted by Nirav Modi, namely Firestar Diamond, A. Jaffee and Fantasy (all Inc) had filed for Chapter 11 Bankruptcy Protection in the Southern District of New York, United States of America,”
PNB requested the MCA to support and join the bankruptcy proceedings in New York, USA in order to help PNB realize its claims in the debtors’ assets.
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The US Bankruptcy Court of Southern District of New York, by its order dated July 26, 2018 recognized the claims of PNB in the proceeds of sale of assets of the properties of the debtor companies. It also authorized PNB to issue subpoenas to compel the examination of Nirav Modi, Mihir Bhansali and Rakhi Bhansali under oath.
Subsequently, 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,” it said.
Interpol has issued a red corner notice against fugitive Nirav Modi’s wife, Ami Modi, in connection with the nearly USD 2 billion Punjab National Bank (PNB) fraud and money laundering case.
Earlier in July, the ED had attached properties of diamantaire Nirav Modi worth Rs 329.66 crores under the Fugitive Economic Offenders Act, 2018 (FEOA).