AMN
Punjab National Bank has received the first tranche of recoveries amounting to Rs 24.33 Crore rupees in fugitive Nirav Modi case related to bank fraud case. The bank informed this to the Ministry of Corporate Affairs which spearheaded the corporate governance litigation in a foreign jurisdictional Court.
The Ministry said, this is an unprecedented achievement of the Government of India, in its fight against corporate fraud in overseas territory. The Ministry has also initiated proceedings for disgorgement of money from the perpetrators, the entities promoted and controlled by Nirav Modi and Mehul Choksi.
In 2018, Punjab National Bank Limited had informed the Ministry of Corporate Affairs, that three companies promoted by Nirav Modi had filed for Bankruptcy Protection in the Southern District of New York, United States of America. The bank requested the ministry to support and join the bankruptcy proceedings in New York, USA in order to help PNB realize its claims in the debtors’ assets.
The maiden repatriation of $ 3.25 million is an unprecedented achievement of the Government of India, Ministry of Corporate Affairs in its fight against corporate fraud in overseas territory. The Ministry also has initiated proceedings for disgorgement of monies from the perpetrators, i.e., the entities promoted and/or controlled by Mr. Nirav Modi/ Mr. Mehul Choksi.
Punjab National Bank Ltd.in 2018 informed the Ministry of Corporate Affairs, Government of India that three companies promoted by Mr. Nirav Modi, namely M/s. Firestar Diamond, Inc., M/s. A. Jaffee, Inc. and M/s. Fantasy, Inc., had filed for Chapter 11 Bankruptcy Protection in the Southern District of New York, United States of America. PNB requested the Ministry of Corporate Affairs to support and join the bankruptcy proceedings in New York, USA in order to help PNB realize its claims in the debtors’ assets.
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 Mr. Nirav Modi, Mr. Mihir Bhansali and Ms. 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 façade of independent companies, which were, in reality, entities promoted and/or controlled by Mr. Nirav Modi, that engaged in ‘round-tripping’ of the diamonds amongst themselves.
