In a London jail, Modi is wanted by the Enforcement Directorate, Central Bureau of Investigation, and other investigation agencies for allegedly defrauding the state-owned Punjab National Bank of Rs 13,400 crore.
“During the second CoC (Committee of Creditors) meeting held on July 15, 2020, the CoC informed the IRP that based upon the decision taken by the CoC members in their Joint Lenders Meeting, they want to take the Corporate Debtor (Firestar Diamond) into liquidation,” observed the Mumbai bench of National Company Law Tribunal (NCLT) in its 7-page order. “A resolution for liquidation of the Corporate Debtor was passed by a voting share of 93.31%.”
While approaching the tribunal with the plea for the liquidation, the lenders observed that there are no business prospects with the company.
“There is no substance in chasing the legal suits and cases for recovery. There is no point in spending good money to make efforts to recover bad money, having a very remote chance of recovery,” argued the lenders. “Any resolution plan is not possible, which could enable the company to pay the entire debts.”
The division bench of judicial member HV Subba Rao and a technical member Shyam Babu Gautam approved the lenders’ plea for the liquidation in its order of August 10.
Last year in July, the Pune bench of the debt recovery tribunal (DRT) had issued a recovery certificate. It directed the fugitive diamantaire, Modi, to pay over Rs 7,200 crore to Bank (PNB) and others.
Nishit Dhruva, the managing partner of law firm MDP & Partners and an advisor to the Corporation Bank, confirmed the development but refused to divulge any details further. “We shall use our experience of other assignments such as Nakshatra World, Vikram Kothari, REI Agro, Varrsana Ispaat Limited etc. and expedite the de-attachment and sale of the assets for distribution to stakeholders and achieve the objectives of IBC,” said Anil Goel, founder chairman of AAA Insolvency Professionals. Shantanu Ray is a partner from AAA Insolvency.
In June 2019, Corporation Bank, one of the consortia of lenders to
Modi’s Firestar Diamond International Pvt Ltd and Firestar International Ltd, approached the tribunal after firms defaulted on dues of Rs 38.65 crore and Rs 41.31 crore, respectively. Corporation Bank is part of the consortium led by Punjab National Bank (PNB) that lent money to the Modi-promoted firms.
Back in January 2018, CBI unearthed a bank fraud of Rs 14,357 crores on a complaint filed by PNB, one of the largest public sector banks, one of the lead lenders of Firestar International, Nirav Modi’s flagship enterprise.
Recently, in July, the tribunal had also ordered the liquidation of Nakshatra World, a subsidiary of Mehul Choksi promoted firm
Gems and NCLT had approved the name of Santanu Ray as the liquidator for the company. As per the latest development, the UK’s Crown Prosecution Service (CPS) is reviewing the London High Court ruling to grant Modi permission to appeal against his extradition order with the Indian government for the next stage in the legal process.
