The government has intervened in the bankruptcy proceedings of Diamond merchant Nirav Modi’s firms in the U.S. to protect the interests of Punjab National Bank, Union Minister P.P. Chaudhary said, amid multi-pronged efforts to deal with the nearly ₹13,000 crore scam.
Against the backdrop of a multi-agency probe into the case, Mr. Chaudhary said that some firms filing for bankruptcy would jeopardise the interests of the PNB.
The Minister of State for Corporate Affairs noted that committing of fraud and violation of Indian laws by these firms necessitated booking of the accused in India.
“Since the investigation against Nirav Modi-led firms ie. Firestar Diamond and other firms is still going on in India for committing fraud against the Punjab National Bank, the filing of bankruptcy by these firms in the U.S. would jeopardise the interest of the Indian bank,” he said. “We have intervened in the bankruptcy proceedings in the U.S. to safeguard our interests,” he said.
On February 27, Nirav Modi-owned Firestar Diamond Inc filed for bankruptcy in the US.
Last month, senior government officials had said the effort would be to try stall the bankruptcy proceedings so that the company’s assets are not liquidated before completion of the probe into the scam.
On February 23, the National Company Law Tribunal (NCLT) had restrained more than 60 entities, including Nirav Modi, Mehul Choksi, various individuals, companies and limited liability partnership firms, from selling their assets.
The Serious Fraud Investigation Office is probing 107 companies and seven limited liability partnerships (LLPs) linked to Nirav Modi and Mehul Choksi groups with regard to the scam.
The minister said the SFIO would submit its report within six months.
Among other agencies, the CBI and the Enforcement Directorate are also investigating the fraud.
