Nirav Modi fraud case: US court calls for PNB staff investigation

By

Isabelle Crossley

Published
May 16, 2018

Following the fugitive jewellery tycoon Nirav Modi’s decision to file for bankruptcy with his three US-based diamond businesses, a US court is asking for an investigation of Punjab National Bank (PNB) employees before such proceedings can begin.

Nirav Modi recently filed for bankruptcy for his three American-based businesses, Firestar Diamond Inc., Fantasy Inc., and A Jaffe.

Following this, the Southern District of New York Bankruptcy Court appointed the firm Alvarez & Marsal to investigate Modi’s alleged fraud. Modi and his Uncle Mehul Choksi are accused of defrauding the PNB and a host of other banks out of over 13,000 crore rupees (approximately three billion US dollars), the largest fraud in India’s banking history. The firm will carry out its investigation before any bankruptcy proceedings can begin in the US.

The Southern District of New York Bankruptcy Court issued a court order, accessed by the Economic Times, stating that Alvarez & Marsal will “conduct a forensic financial analysis of the books and records of the debtors, bank records, vendor records, and any and all relevant information of other entities consistent with the investigation, and trace the movement of monies obtained under the alleged fraud circumstances against PNB to the debtors, and related entities and individuals.”

The PNB has not yet issued an official response.

Modi and Choksi have not yet returned to India to face charges.