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Court stays ED attaching assets of Choksi’s Gitanjali Gems to fraud case

today Mar 8, 2019
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An appellate tribunal decided to stay the order allowing the Enforcement Directorate to attach assets of Mehul Choksi’s business Gitanjali Gems to its fraud case against him and nephew Nirav Modi.

The ED’s POA has been stayed so it must wait to attach Gitanjali assets to the PNB fraud case - Gitanjal Gems- Facebook

In response to ICICI Bank moving the court to block the ED from attaching assets of fugitive jewellery tycoon Mehul Choksi to its case against him, the appellate tribunal decided to stay the order. The ED must now wait to attach assets pertaining to Choksi’s business.

ICICI Bank argued that, should the ED be able to attach assets of Gitanjali Gems to its case, this would prevent the business from being properly valued as is necessary for bankruptcy proceedings. Gitanjali Gems was admitted for insolvency proceedings on October 8, 2018,  after ICICI Bank approached the National Company Law Tribunal with a plea to recover Rs 6,000 crore ($902 million) from the business. 

In December 2018, a Prevention of Money Laundering Act court allowed the ED to provisionally attach assets of Gitanjali Gems to its case. However, the provisional order of attachment has now been stayed to allow bankruptcy proceedings to go ahead. 

Until the next hearing, the resolution professional has been ordered not to dispose of any property without the tribunal’s permission. Although Gitanjali Gems’ creditors committee has met twice since the insolvency proceedings began, little progress has been made as the ED is currently holding the business’ records and assets. 

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