Part of Nirav Modi’s assets distributed to Punjab National Bank following liquidation procedures in U.S.

By

Isabelle Crossley

Published
Aug 26, 2020

A total of $3.25 million (Rs 24.33 crore) of jewellery tycoon Nirav Modi’s stripped assets has been distributed to the Punjab National Bank, as part of ongoing recovery procedures in the U.S.

 
Nirav Modi, who remains in UK custody and is accused of defrauding the PNB, has seen assets stripped from three of his diamond and jewellery businesses in the U.S. after he wilfully defaulted on loans, which led to the liquidation of the businesses. Three businesses promoted by Modi, Firestar Diamond, A Jaffee, and Fantasy, all filed for Chapter 11 bankruptcy in New York, in 2018, the same year that news of Modi’s alleged fraud broke in the media. 
 
The PNB was awarded part of the funds recently recovered from the three businesses after making claims with support from the Indian Ministry of Corporate Affairs, ET Bureau reported. The total liquidated amount from the three businesses released by the US Chapter 11 trustee stands at $11.04 million and further recoveries will depend on the settlement of other claims. 

The U.S. court had issued subpoenas in 2018 that led to the examination of Modi, along with Firestar Diamond director, Mihir Bhansali, and his wife, Rakhi Bhansali. The court’s appointed examiner reported that employees of the three businesses had engaged in the illegal practice of round-tripping diamonds among themselves through a smokescreen of independent companies, which were, in fact, also owned by Modi. 
 
Along with the U.S. procedures, Modi has also had assets stripped in India after Indian authorities named him as a fraudulent economic offender as part of the Prevention of Money Laundering Act. Indian authorities are working to extradite Modi from the UK to India to stand trial for fraud and an extradition hearing will take place this autumn in London, UK.
 
The PNB fraud is valued at over Rs 14,000 crore and is one of the largest scale frauds in India’s banking history. Modi’s uncle and Gitanjali Gems promoter, Mehul Choksi, is also accused of taking part in the fraud and is believed to be residing in Antigua, currently alluding capture.