LIQUIDATION OF FIRESTAR INTERNATIONAL

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On 29th January 2018, the PNB bank asked the CBI to get involved in the investigation about Nirav Modi as he had disappeared along with his family since 1st January. The owner and designer of jewelry Nirav Modi had taken a loan of 11,356.84 crore from Punjab National Bank, and went absconding leaving the PNB liable for the amount. The fraud is 49 times of the net profit earned by PNB in the quarter of 31st December 2017.

 

Nirav Modi who had disappeared in Jan 2018 was in UK since June 2018, he was recognized by an Indian origin clerk at a bank and he immediately reported it to the police. He was arrested by the UK police on behalf of the Indian authorities.

 

Firestar International is a company of Nirav Modi. The lenders of Firestar International have decided to liquidate the company but there is a slight possibility of delay if an auction arises. This decision was taken based on votes. The lenders will now approach the National Company Law Tribunal (NCLT) with a formal request to initiate proceedings. The company’s assets are in the custody of the Enforcement Directorate after Modi was charged with offences under the Prevention of Money Laundering Act and the Fugitive Offenders Act.

 

With all these allegations it would further complicate matters making it difficult to find a suitor for taking over the company. Ram Ratan Kanoongo, a court appointed interim resolution professional is there to be the official liquidator of the company.

 

Nirav Modi has over a dozen subsidiaries located in various international jurisdictions such as Japan and Belgium, but their parent company is Firestar International. This is said to be the first-ever liquidation order for any company embroiled in the fraud schemed by the Modi-Choksi duo before they fled the country.

NEWS REPORTED BY:

VRIDHI BHAGNARI.