The Punjab National Bank (PNB) today informed the Ministry of Corporate Affairs that it has received a sum of $3.25 million (Rs 24.33 crores) as the first tranche of recoveries in the Nirav Modi case from the US.
Describing this development as a "maiden success" and an "unprecedented achievement", the ministry said further recoveries in this case is subject to other expenses and settlement claims of other claimants.
Diamantaire Nirav Modi is wanted in India in connection with the nearly $2 billion Punjab National Bank (PNB) fraud and a money laundering case. A warrant against him was issued by the UK home office at the behest of India.
"The Punjab National Bank has informed the Ministry of Corporate Affairs, 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. Upon liquidation of the debtors' assets by the US Chapter 11 Trustee, a sum of Rs 82.66 crore is available for distribution to unsecured creditors including PNB," the ministry said in a statement.
It said this repatriation on $ 3.25 million is "an unprecedented achievement" in the government's "fight against corporate fraud in overseas territory".
Ministry of Corporate Affairs (MCA) maiden success in recovery of $3.25 million (equivalent of Rs. 24.33 crore) in Nirav Modi case from USA.
— Ministry of Finance (@FinMinIndia) August 25, 2020
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"The ministry also has initiated proceedings for disgorgement of monies from the perpetrators, i.e., the entities promoted and/or controlled by Nirav Modi/ Mehul Choksi," the statement said.
According to the ministry, in 2018, the Punjab National Bank informed it that three companies promoted by Nirav Modi -- Firestar Diamond, A Jaffee, and Fantasy -- had filed for bankruptcy protection in the Southern District of New York, USA.
Following this, PNB requested the ministry to support and join the bankruptcy proceedings in New York in order to help PNB realize its claims in Nirav Modi's 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 PNB to issue subpoenas to compel the examination of Nirav Modi (and others)," the statement said.
Detailing the proceedings of the case and the nature of fraud committed by Nirav Modi, the ministry said, "One prominent feature of the fraud was the apparent façade 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."