Nirav Modi files for bankruptcy for US businesses, investigation to ensue

By

Isabelle Crossley

Published
May 9, 2018

The fugitive jeweller Nirav Modi has filed for bankruptcy for three of his US-based companies and it is hoped that the investigation into his US business dealings could shed light on the wider fraud case.

Three of the Indian jewellery tycoon Nirav Modi’s companies, A Jaffe, Fantasy Inc., and Firestar Inc., have filed for Chapter 11 bankruptcy in a US court. This means that the companies will be investigated in America and there is hope that missing links in the Indian investigation will be provided by this investigation.

The Southern District of New York’s Bankruptcy Court has appointed the global professional services firm Alvarez & Marsal to conduct the investigation into the companies and the fraud at the Punjab National Bank (PNB). This investigation will proceed any bankruptcy proceedings can take place in America. The PNB has also provided information to the US court about the alleged fraud.

According to the Chapter 11 filing, Modi’s business A Jaffe owes over six million dollars (approximately 40 crore rupees) to “unsecured creditors” located in the UAE. Two have been named as Tricolor Diamonds FZE and Pacific Diamonds and the Indian Central Bureau of Investigation’s (CBI’s) First Information Report (FIR) also names these firms as beneficiary exporters who received money from the PNB’s letters of undertaking (LoUs). It is hoped that further investigation will uncover more about these links.