The Ministry has initiated proceedings for disgorgement of monies from the perpetrators, i.e., the entities promoted or controlled by the fugitives Nirav Modi and Mehul Choksi
Nirav Modi
The Punjab National Bank (PNB) has recovered $3.25 million (around Rs 24.33 crore) as the first tranche of recoveries upon liquidation of the assets of companies promoted by fugitive diamantaire Nirav Modi in the US.
In a statement on Tuesday, the Ministry of Corporate Affairs (MCA) said that upon liquidation of the debtors' assets by the US Chapter 11 Trustee or the bankruptcy administrator, a sum of $11.04 million or around Rs 82.66 crore is available for distribution to unsecured creditors including PNB.
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"Punjab National Bank Ltd (PNB) has informed the Ministry of Corporate Affairs (MCA) which spearheaded the corporate governance litigation in a foreign jurisdictional Court, that it has received $3.25 million (equivalent of Rs. 24.33 crore) as the first tranche of recoveries," it said.
Further recovery is subject to other expenses and settlement of claims of other claimants. The official statement said that the maiden repatriation of $3.25 million is an "unprecedented achievement" of the Central government's Ministry of Corporate Affairs in its fight against the corporate fraud in overseas territory.
The Ministry has initiated proceedings for disgorgement of monies from the perpetrators, i.e., the entities promoted or controlled by the fugitives Nirav Modi and Mehul Choksi. Punjab National Bank Ltd. in 2018 informed the Ministry of Corporate Affairs that three companies promoted by Nirav Modi, namely M/s. Firestar Diamond, A. Jaffee and Fantasy, had filed for Chapter 11 Bankruptcy Protection in the Southern District of New York, US.
The PNB requested the Ministry of Corporate Affairs to support and join the bankruptcy proceedings in New York in order to help the PNB realise its claims in the debtors' assets. The US Bankruptcy Court of Southern District of New York, by its order dated July 26, 2018 recognised the claims of PNB in the proceeds of sale of assets of the properties of the debtor companies.
It also authorised the PNB to issue subpoenas to compel the examination of Nirav Modi, Mihir Bhansali and Rakhi Bhansali under oath. Subpoena or witness summons is a writ issued by a government agency or a court to compel testimony by a witness or production of evidence under a penalty for failure.
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 around-tripping' of the diamonds amongst themselves," the MCA statement said.
In another development, Interpol has issued a Red Corner Notice (RCN) against Nirav Modi's wife Ami Modi, a US citizen, on the basis of the Enforcement Directorate (ED) request in connection with its probe into the Rs 13,500 crore PNB fraud case.
Nirav Modi and his uncle Mehul Choksi are under investigation by both the CBI and the ED. Choksi is now believed to be in Antigua.
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