NCLT Begins Insolvency Proceedings Against Nirav Modi Linked Company Called Firestar Diamond International

The National Company Law Tribunal (NCLT) has initiated a corporate insolvency resolution process involving Firestar Diamond International (FDIPL), which happens to be a key subsidiary owned by Firestar International.

Incidentally, FDIPL was wholly owned by absconding Punjab National Bank (PNB) fraud accused Nirav Modi, who is now in a jail in London.

FDIPL’s parent firm Firestar International had extended an unconditional, absolute, and irrevocable guarantee towards the rated bank facilities.

It may be recalled that in February 2018, government investigative agencies had launched a probe against Nirav and his uncle Mehul Choksi, who is the promoter of Gitanjali Gems, for their involvement in the USD 2-billion PNB fraud.

In September 2019, the Gurgaon-based Oriental Bank of Commerce issued notices to both Modi and Choksi. The two have been termed wilful defaulters for unpaid loans by their respective companies.

Modi’s companies Firestar International and Firestar Diamond International had not repaid their outstanding dues.

Earlier, an investigation into the money trail from Modi’s firms had been started by the Enforcement Directorate, which had also provisionally attached various movable and immovable properties of Modi, including houses, personal belongings, and automobiles.

Further, a consortium of lenders against Nirav Modi, Firestar International, and Radashir Jewellery Company, had also presented an application to the Debt Recovery Tribunal-1 (DRT) in Mumbai during 2018— which was decided in July this year — and is pursuing a total claim of Rs 232 crore.