PNB Scam: Nirav Modi’s flagship company Firestar Diamond files for bankruptcy in US

New York/Mumbai: Firestar Diamond, the flagship company of billionaire Nirav Modi, currently in the eye of the Punjab National Bank scam, has filed for bankruptcy in the United States under Chapter 11.

A Chapter 11 filing under the Bankruptcy code usually allows a company to reorganise its business. The company has listed total worth of its assets in the range of $50 million and $100 million, according to a Reuters report. The bankruptcy filing includes Firestar’s A. Jaffe Inc. wedding jewellery affiliate and Fantasy Inc. affiliate.  The estimated number of creditors is between 50 and 99. The company’s diamond operations span the US, Europe, the Middle East and the Far East.

For Modi, both the events – the burgeoning fraud amount and the filing for bankruptcy – have come a day before his 47th birthday. Modi has been shown as ‘inventor’ in details filed against his company registered at 5th Avenue in New York. The Chief Executive Officer is shown as Mihir Bhansali and the Chief Financial Officer is Ajay Gandhi.

Also Read: PNB scam: Total fraud amount may increase by Rs 1,323 cr, says Punjab National Bank

Meanwhile, the PNB fraud case has taken a turn for the worse. The fraudulent transactions unearthed this month at one of its Mumbai branches, which were pegged at Rs 11,400 crore, have swollen to roughly Rs 12,700 crore. It is understood that the bank has unearthed fresh LoUs of Rs 1,251 crore — all linked to Gitanjali group of companies.

The disclosure was made even as the CBI questioned former PNB Managing Director Usha Anant Subramanian and ICICI Bank Executive Director N.S. Kanan in connection with case. “The agency also questioned the ICICI Executive Director because it was the leader of a consortium of banks that sent money to Mehul Choksi’s Gitanjali Group,” a CBI official, who did not want to be named, said.

In the evening, a statement from ICICI said it was a lender of working capital to the Gitanjali group of companies along with several other banks in the consortium. It said its exposure was not the largest in the consortium and it had not lent any money to the Nirav Modi group, nor did it have any buyer’s credit exposure against LoUs to the two groups.The CBI also questioned two PNB General Managers, Nehal Ahad and Vimlesh Kumar, apart from two statutory auditors of the PNB.  The agency has till date arrested 12 persons in the case.