In win for MCA, SC reaffirms partial relief only for 4 directors of Nirav Modi firms

The Supreme Court has clarified that it had stayed the National Company Law Appellate Tribunal (NCLAT) order for only four former independent directors of fugitive jewellers Nirav Modi and Mehul Chowksi’s firms. It said that the four directors, who had moved court, have been asked to submit their replies. The next hearing will be held in November.

The NCLAT had upheld a plea from the Ministry of Corporate Affairs (MCA) to freeze the assets of 70 directors of companies belonging to Modi and Choksi, in connection with the Rs 13,000 crore Punjab National Bank (PNB) fraud case.

The MCA challenged the stay on the NCLAT order and submitted an interim report of the Serious Fraud Investigation Office (SFIO), which indicates that independent directors were involved in malpractices in many instances. It also submitted a US Bankruptcy Court-appointed examiner’s report on the duo.

The MCA ordered the SFIO to investigate 114 companies belonging to Modi and Gitanjali Group of Companies.

On September 10, independent directors of Modi and Choksi’s firms had argued in court that they had no role in the day-to-day operations of the two companies.

On February 23, the National Company Law Tribunal (NCLT) had passed an interim order to freeze assets of all independent directors following a plea by the MCA