Gitanjali Gems’ creditors vote to reject continuing resolution process, initiate liquidation

By

Isabelle Crossley

Published
Apr 17, 2019

Fugitive jewellery tycoon Mehul Choksi’s business Gitanjali Gems is set for liquidation after its committee of creditors voted to reject the continuation of the resolution process by 54 percent.

As Choksi continues to plead his innocence as a major part in the Punjab National Bank fraud case that totalled Rs 14,000 crore ($2 billion), his jewellery business will go into liquidation. Gitanjali Gems owes over Rs 12,500 crore to 31 financial creditors as Choksi resides in Antigua after fleeing India before news of the scandal broke. 

“The 180 days since the resolution process began ended on April 6,” said the business in a filing on the Bombay Stock Exchange made on April 16, as reported by ET Bureau. “Since extension is not approved by the lenders, the next logical step is to go for liquidation.” The vote swung 54 percent in favour of liquidation at the last creditors committee meeting on March 28.

Choksi is accused along with his nephew and fellow jeweller Nirav Modi of defrauding the PNB between 2011 and 2017 by using fake letters of undertaking at the Brady House branch of the PNB. Indian authorities are working to extradite Choksi from Antigua and Modi from the UK where he is currently under UK police custody.