Resolution Professional disputes ED seizure of Gitanjali Gems’ assets
The Resolution Professional responsible for fugitive Mehul Choksi’s jewellery business Gitanjali Gems has contested the Enforcement Directorate’s (ED’s) seizure of the business’ assets, stating that it interferes with the insolvency resolution process.
The ED filed a case against Choksi and his business under the Prevention of Money Laundering Act (PMLA) and then ICICI Bank filed insolvency proceedings against Gitanjali Gems. The tribunal allowed ICICI Bank’s plea last October and also approved the appointment of Vijay Kumar Garg of Duff & Phelps as the RP. However, there is now a clash of interests between the ED’s decision to attach Choksi’s property to the criminal case against him for alleged fraud at the Punjab National Bank (PNB) and ICICI Bank’s need to value the property as part of the insolvency proceedings.
The RP has asked the National Company Law Tribunal that the ED be asked to release Choksi’s and his business’ assets. The RP stated that the assets must be valued independently to follow the bankruptcy code.
Although the business’ creditors committee does concede that the assets that the ED has in its custody are suspected to be proceeds of crime, the RP argues that the assets should be given a valuation until a conviction is formally made. Gitanjali Gem’s financial creditors have made claims against the business totalling around Rs 6,000 crore ($902 million).
Choksi is still in Antigua and refuses to return to India to stand trial citing health concerns. Indian authorities are working to try to extradite Choksi to India but negotiations are moving at a glacial pace as Choksi has taken Antiguan citizenship.
Copyright © 2022 FashionNetwork.com All rights reserved.