Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 3.5
Article rating: 5.0
Article rating: No rating
Article rating: 4.7
Article rating: No rating
Article rating: No rating
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 5.0


Nirav Modi’s Firestar Diamond files for bankruptcy in New York court

Author: IANS/Wednesday, February 28, 2018/Categories: Banking & Financial Services

Nirav Modi’s Firestar Diamond files for bankruptcy in New York court

New Delhi - The ongoing Punjab National Bank (PNB) fraud case took a turn for the worse as the bank reported an additional Rs 1,300 crore unauthorised transactions, taking the estimated quantum to around Rs 12,600 crore in the scam related to diamond trader Nirav Modi and owner of Gitanjali Gems, Mehul Choksi.

In a 11.22 pm filing with the stock exchanges on Monday, the bank said: "In continuation to our filing with stock exchanges on February 14, 2018, we have to inform that quantum of reported unauthorised transactions can increase by $204.25 million."

Earlier on February 14, PNB, the second largest public sector bank in India, had said it had detected a $1.8 billion or Rs 11,300 crore, fraud in the Brady House Branch in Mumbai. On Tuesday, the bank said in regulatory filings with the stock exchanges that it had appointed a group Chief Risk Officer. 

In another development, Firestar Diamond Inc, the US company of Indian billionaire diamond trader Nirav Modi filed for bankruptcy in a New York court, under chapter 11.

According to the court filing at the Southern District Of New York on Monday, the firm listed assets and liabilities in the range of $50 million and $100 million. A Chapter 11 filing under the Bankruptcy code usually allows a company to reorganise its business.

The Central Bureau of Investigation (CBI) had filed the first FIR in the scam on February 14 against Nirav Modi, his wife Ami, brother Nishal, uncle Mehul Choksi and his firms Diamond R US, Solar Exports and Stellar Diamond.

The CBI on Tuesday said it had questioned former Punjab National Bank Managing Director Usha Anant Subramanian and ICICI Bank Executive Director N.S. Kanan in connection with the bank fraud case.

"The agency also questioned the ICICI Executive Director because it was the leader of a consortium of banks that sent money to Mehul Choksi's Gitanjali Group," a CBI official, who did not want to be named, said.

In the evening, a statement from ICICI said it was a lender of working capital to the Gitanjali group of companies along with several other banks in the consortium. It said its exposure was not the largest in the consortium and it had not lent any money to the Nirav Modi group, nor did it have any buyer's credit exposure against LoUs to the two groups.

The CBI also questioned two PNB General Managers, Nehal Ahad and Vimlesh Kumar, apart from two statutory auditors of the PNB. 

The agency has till date arrested 12 persons in the case.

Keeping in view the biggest-ever banking fraud in India, the government on Tuesday set a deadline of 15 days for public sector banks (PSBs) to examine all non-performing assets above Rs 50 crore for possible fraud and to identify operational and technical gaps.

"PSB MDs directed to detect bank frauds and consequential wilful default in time and refer cases to CBI. To examine all NPA accounts above Rs 50Cr for possible fraud. Involve ED/DRI for PMLA/FEMA/EXIM violations if any," Financial Services Secretary Rajeev Kumar said in a tweet on the Finance Ministry's Twitter handle

He also said that executive directors and chief technological officers of the PSBs have to prepare a blueprint for combating increasing risks.

With the escalation of the fraud amount, the bank's shares tanked on the bourses. The bank's stocks closed 12.11% down on Tuesday at BSE at Rs 98.35 per share.

Print Rate this article:
No rating

Number of views (339)/Comments (0)

rajyashree guha


Other posts by IANS
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free