Nirav Modi case: PNB recovers USD 3.25 million as first tranche from USA

The Punjab National Bank has informed the Ministry of Corporate Affairs (MCA) that it has received USD 3.25 million (the equivalent of Rs 24.33 crores) as the first tranche of recoveries in fugitive Nirav Modi case from the United States. 

"Upon liquidation of the debtors' assets by the US Chapter 11 Trustee, a sum of $ 11.04 million (equivalent of Rs 82.66 crore) is available for distribution to unsecured creditors including PNB. Further recovery therefrom is subject to other expenses and settlement of claims of other claimants," MCA said in a statement.

The Ministry also has initiated proceedings for disgorgement of monies from the perpetrators — the entities promoted and/or controlled by Nirav Modi and his uncle and fellow fugitive Mehul Choksi.

"Punjab National Bank Limited in 2018 informed the MCA that three companies promoted by Nirav Modi, namely Firestar Diamond, A. Jaffee and Fantasy (all Inc) had filed for Chapter 11 Bankruptcy Protection in the Southern District of New York, United States of America," MCA said.

PNB requested the MCA to support and join the bankruptcy proceedings in New York in order to help the state-owned bank realize its claims in the debtors' assets.

The US Bankruptcy Court of Southern District of New York, by its order dated July 26, 2018, recognized the claims of PNB in the proceeds of the sale of assets of the properties of the debtor companies. It also authorized PNB to issue subpoenas to compel the examination of Nirav Modi, Mihir Bhansali, and Rakhi Bhansali under oath.

Subsequently, on August 24, 2018, the Examiner appointed by the said Court submitted his report which explains the modus operandi of the fraud and the manner in which the US-based employees of the debtors participated in the fraud.

"One prominent feature of the fraud was the apparent facade of independent companies, which were, in reality, entities promoted and/or controlled by Nirav Modi, that engaged in 'round-tripping' of the diamonds amongst themselves," MCA said.

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PNB scam accused

Nirav Modi (49), is currently lodged in a UK jail after being arrested in London in March 2019 and is currently fighting extradition to India. He has been declared a fugitive economic offender by a Mumbai court early this year and the court had also ordered the confiscation of his assets. The ED has already confiscated about Rs 329 crore of his linked properties under the Fugitive Economic Offenders Act, 2018 (FEOA). The businessman, Choksi, and others are being probed by the ED on money laundering charges in connection with an over USD 2 billion alleged bank fraud at a PNB branch in Mumbai.

READ | PNB Scam: ED Retrieves Goods Worth Rs 1350 Cr Belonging To Nirav Modi, Mehul Choksi Firms

READ | Nirav Modi's Property Worth Rs 1,400-crore Confiscated, PMLA Court Passes Order