Nirav Modi Scam: PNB gets ₹24 crore as First Tranche of Recovery From US

State-owned Punjab National Bank on Tuesday informed the government that it has received ₹24.33 crores as the first tranche of recoveries in the Nirav Modi fraud case. “Punjab National Bank Ltd. (PNB) has informed the Ministry of Corporate Affairs (MCA) which spearheaded the corporate governance litigation in a foreign jurisdictional Court, that it has received $ 3.25 million (the equivalent of Rs. 24.33 crores) as the first tranche of recoveries. Upon liquidation of the debtors’ assets by the US Chapter 11 Trustee, a sum of $ 11.04 million (the equivalent of Rs. 82.66 crore) is available for distribution to unsecured creditors including PNB," an official statement from the corporate affairs (MCA) ministry said. The government has also has initiated proceedings for ‘disgorgement of monies from the perpetrators’-- entities promoted and controlled by Nirav Modi and Mehul Choksi.


In January 2018, the lender had discovered over ₹14,000-crore fraud, involving jewelers Mehul Choksi and Nirav Modi at one of its branches in January. Thereafter the lender had informed the MCA that three companies promoted by Nirav Modi--Firestar Diamond, A. Jaffee, and Fantasy had filed for bankruptcy protection in the southern district of New York. PNB had urged the ministry to support and join the bankruptcy proceedings in New York, the USA to help the lender realize its claims in the debtors’ assets. In the 26 July 2018 order, the US Bankruptcy court recognized the claims of PNB in the proceeds of the sale of assets of the properties of the debtor companies. “Subsequently, on August 24, 2018, the examiner appointed by the New York Bankruptcy Court submitted his report.


The report 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 façade 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," the statement said. Interpol on Tuesday has issued a red corner notice against Nirav Modi's wife, Ami Modi, in connection with the nearly $2 billion Punjab National Bank (PNB) fraud and money laundering case. The red corner notice by the worldwide police cooperation and crime control body, against Ami, who is a prime accused in the case, has been issued at the behest of the Enforcement Directorate (ED), officials at India's economic intelligence agency said.




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