“Punjab National Bank 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 (equivalent of ₹24.33 crore) as the first tranche of recoveries.
About Nirav Modi Scam
Nirav Modi had perpetrated an over $2 billion worth financial scam at the Punjab National Bank.
He is lodged in a UK jail after being arrested in London in March, 2019 and is currently fighting extradition to India.
He was declared a fugitive economic offender by a Mumbai court earlier this year. The court had also ordered confiscation of his assets.
Fraud Realised
In 2018, the lender had informed the ministry that three companies promoted by Nirav Modi — Firestar Diamond, Inc, A Jaffee, Inc and Fantasy, Inc had filed for Chapter 11 bankruptcy protection in the Southern District of New York, US.
Recovery
In a 26 July 2018 order, the US bankruptcy court recognized Punjab National Bank’s claims in the proceeds of sale of assets of the properties of the debtor companies.
Repayment
Upon liquidation of the debtors’ assets by the US Chapter 11 Trustee, a sum of $11.04 million (equivalent of ₹82.66 crore) is available for distribution to unsecured creditors, including PNB,” MCA said.
PNB Requested MCA
PNB Requested Ministry of Corporate Affairs to support and join the bankruptcy
Which was proceedings in New York to help PNB realise its claims in the debtor’s assets.
Money Disgorgement
The ministry also has initiated proceedings for disgorgement of monies from the perpetrators — the entities promoted and/or controlled by fugitive jewellers Nirav Modi and Mehul Choksi.
It also authorised the bank to issue subpoenas to compel the examination of Nirav Modi, Mihir Bhansali and Rakhi Bhansali under oath, the release said.
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