Punjab National Bank (PNB) on Tuesday informed the government that it has received the first tranche of ₹24.33 crore in recoveries in the fraud involving Nirav Modi.
“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. 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.
The lender expects another ₹50 crore, a senior official said, requesting anonymity.
The government has also initiated proceedings for ‘disgorgement of monies from the perpetrators’—entities promoted and controlled by Modi and Mehul Choksi.
In January 2018, the state-owned lender had discovered an over ₹14,000 crore fraud involving diamantaires Choksi and Modi at one if its branches.
Thereafter the lender informed the MCA that three companies promoted by Modi—Firestar Diamond, A. Jaffee and Fantasy—had filed for bankruptcy protection in the southern district of New York.
Punjab National Bank had urged the ministry to join the bankruptcy proceedings in New York, US, to help the lender realize its claims in the debtors’ assets.
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.
News Source: Livemint