New Delhi : The Ministry of Corporate Affairs is considering legal options to stall bankruptcy proceedings in the US against diamantaire Nirav Modi’s group firm Firestar Diamond, amid stepped up action in the over Rs 13,000-crore scam at Punjab National Bank, according to officials.
The move comes close on the heels of the National Company Law Tribunal (NCLT) restraining more than 60 entities — including Nirav Modi, Mehul Choksi, various individuals, companies and limited liability partnership firms — from selling their assets.
A multi-agency probe, including by the Serious Fraud Investigation Office (SFIO), is progressing into the scam, whose kingpin is alleged to be Nirav Modi. The fraud, the biggest so far in the Indian banking industry, was perpetrated by way of issuance of fraudulent Letters of Undertaking (LoUs). According to officials, Firestar Diamond that filed for bankruptcy in a US court is a subsidiary of one of the companies against whom the NCLT has passed the order.
Since there is a strong possibility of fund diversion among various group entities, money could well have been diverted to Firestar Diamonds, they added.
Against this backdrop, the ministry is exploring legal options with regard to the bankruptcy case of Firestar Diamond in the US and the process of engaging lawyers is being looked at, the officials said.
They said the effort would be to stall the bankruptcy proceedings so that the company’s assets are not liquidated before completion of the probe into the scam.
Meanwhile, sources said PNB is looking to be part of the bankruptcy proceedings against the firm in the US as a claimant.
PNB to stake claim in insolvency move
New Delhi : Punjab National Bank (PNB) plans to take part in the bankruptcy proceeding of Firestar Diamond. The bank is exploring all options for the recovery, including participating in the bankruptcy proceeding of Firestar Diamond, sources said. The bank is in the process of hiring legal experts to take the matter forward.
The legal firm would be hired soon.
Various pros and cons are being examined in order to make watertight case for the recovery, the sources said, adding the bank is part of unsecured creditor category.
When contacted, PNB declined to comment on the matter.