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Nirav Modi-PNB Fraud: Firestar Diamond Files For Bankruptcy in United States

The bankruptcy case has been assigned to Judge Sean H. Lane and an "order for relief entered".

Published: February 27, 2018 9:34 PM IST

By News Desk

Nirav Modi

New York, Feb 27: Nirav Modi‘s international jewellery business Firestar Diamond on Monday filed for bankruptcy in the US. Firestar Diamond, Inc filed the Chapter 11 petition in the New York Southern Bankruptcy Court yesterday, according to the court filing. The bankruptcy case has been assigned to Judge Sean H. Lane and an “order for relief entered”.

Nirav Modi and Mehul Choksi on Tuesday responded to the Enforcement Directorate summons, saying they will not be able to return to India as their passports have been revoked. The agency is now set to move the court to secure non-bailable warrants against Choksi and Modi, the prime accused in Rs 11,400 crore Punjab National Bank (PNB) fraud case.

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The ED had issued three summons to the duo asking them to appear before the agency in connection with the PNB fraud case. To the summons, Choksi’s lawyer Sanjay Abbot said that his client can’t honour it as he cannot travel due to the revocation of his passport.

The ED on Monday examined the state-owned bank’s Executive Director KV Brahmaji Rao to understand how the alleged fraud was detected and other banking procedures.

The CBI on Tuesday said that the Punjab National Bank (PNB) informed the investigation central agency that they had detected a further scam of Rs 1,251 crores with respect to Gitanjali Gems. Gitanjali Gems is owned by Nirav Modi’s uncle Mehul Choksi.

If added, the PNB fraud now sums up to Rs 12,636 crore. In connection with the case, the CBI has been questioning former Managing Director of Punjab National Bank (PNB) Usha Ananth. NS Kannan, executive director of ICICI Bank, has also been questioned by the central agency.

Earlier in the day, the finance ministry directed all the Public Sector Banks (PSBs) to probe all NPA accounts with more than Rs 50 crore of possible fraud. The ministry has directed the PSBs to report the cases to Central Bureau of Investigation (CBI)

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