Soon, a court appointed liquidator in India will start auctioning precious metals and gemstones belonging to Firestar Diamond International Pvt, which was initially owned by former tycoon and diamantaire Nirav Modi, to clear total claims of lenders that cost more than INR 12,000 crores ($1.5 billion).
The court-appointed liquidator to handle the bankruptcy proceedings, Santanu T. Ray from AAA Insolvency, said the auction will occur on March 25. “This will be the first auction of precious metals and stones” released by the government agency, which probes white-collar crimes. Santanu T Ray was appointed as a Firestar Diamond International Private Limited liquidator by the Mumbai bench of the National Company Law Tribunal (NCLT) in February 2020.
Punjab National Bank, Canara Bank, IDBI Bank Ltd., and Union Bank of India Ltd. are among the lenders that extended credit to the company, which was allegedly involved in one of the biggest fraud cases in India.
Over the past decade in the diamond industry in India, Nirav Modi has become the poster boy for a series of bank frauds. The Indian government charged Modi with defrauding the country’s second-largest bank, Punjab National Bank, of around $2 billion using credit guarantees for his diamond business. Modi has said all allegations of wrongdoing against him are false and contested his extradition from the United Kingdom.
According to Ray, the liquidator has engaged the Gemmological Institute of India, an industry group that provides certification services, to gauge the correct value of the gold and diamond items.
Since the beginning of 2018, Nirav Modi has been absconding from the country, and according to a report by the Hindustan Times, “The offices/factories and all other major and substantial assets of the corporate debtor had been attached by the Enforcement Directorate.”
Source: Free Press Journal
Being accused of one of the biggest bank frauds in the nation, Nirav Modi and his uncle Mehul Choksi created a complex web of deception through fraudulent Letters of Undertaking (LoUs) to siphon off ₹14,000 crores from state-owned Punjab National Bank in connivance with some bank officials.
Nirav Modi fled India in 2018 to escape the law shortly before a case was registered against him and his associates. After several twists and turns in a protracted legal case, Nirav Modi lost his appeal against extradition to India last November as the High Court in London ruled that his risk of suicide was not such that it would be either unjust or oppressive to extradite him to face charges of deception and money laundering.
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