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The National Company Law Tribunal (NCLT) has ordered the initiation of corporate insolvency resolution process (CIRP) against Firestar Diamond International Pvt. Ltd. (FDIPL) which is an entity completely owned by Nirav Modi, who is listed as the Director of the company along with Himanshu Trivedi . Modi is currently in a jail in London.
The above entity is a subsidiary of the Firestar International. FDIPL is among the two jewellery manufacturing units. It is located in Surat, Gujarat in the Surat Special Economic Zone (SURSEZ). The other one being the Radashir Jewellery Company of which Modi is the sole Director. In February 2018, the government had ordered an investigation against Nirav Modi and his uncle Mehul Choksi for the very famous $2Billion Punjab National Bank fraud. Earlier the Enforcement Directorate (ED) had also conducted an investigation against them and had ordered the attachment of Nirav Modi’s personal belongings, his house and his properties.
A bunch of lenders of the FDIPL, Radashir Jewellery Company and Firestar International had filed an application against the entities before the Debt Recovery Tribunal (DRT) in Mumbai last year. The case was disposed of in July this year and the DRT ordered a recovery of Rs. 232 crore from the entities. The lenders include the Punjab National Bank, Oriental Bank of Commerce, Bank of India, Bank of Baroda, Corporation Bank, UCO Bank, United Bank of India, and Bank of Maharashtra who filed the application.
Almost all of Modi’s assets have been attached by the Enforcement Directorate and it is very likely that the company would not have any bidder for it and what would follow is a liquidation process authorised by the state. Modi however is in custody in a jail in London and has till now applied for bail altogether four times and has been denied every time. He is also fighting a case for his extradition to India. Both Modi and Choksi were declared as Non-Performing Assets (NPA) by the Oriental Bank of Commerce (Gurgaon) in March 2018 and were termed as wilful defaulters owing to their unpaid dues.
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