Punjab National Bank (PNB) 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 as the first tranche of recoveries.
Upon liquidation of the debtors’ assets by the US Chapter 11 Trustee, a sum of $11.04 million is available for distribution to unsecured creditors, including PNB.
The release also mentions that the ministry has initiated proceedings for disgorgement of monies from the perpetrators, which are the entities promoted or controlled by Nirav Modi or Mehul Choksi, following the bankruptcy filings of three companies promoted by Nirav Modi, namely Firestar Diamond, A Jaffee and Fantasy.
PNB requested MCA to support and join the bankruptcy proceedings in New York to help PNB realise its claims in the debtor's assets.
The United States Bankruptcy Court of Southern District of New York also authorised PNB to issue subpoenas to compel the examination of Modi, Mihir Bhansali, and Rakhi Bhansali under oath.
In recent years, Indian banks have learned some hard lessons in the corporate loan business from wily promoters. These promoters, after defaulting thousands of crore worth loans from these banks, have fled the country to never return. In most of these cases, some or other fraudulent transactions are involved. Investigators are examining the dirty deals involving these businessmen, with attempts for extradition still on.
Currently, an Interpol global arrest warrant has been issued against Ami Modi, wife of prime accused Nirav Modi in the over $2 billion PNB bank fraud case, on charges of money laundering. The warrant has been issued by the global police body on the request of the Enforcement Directorate (ED).
Once such a notice is issued, the Interpol asks its 192-member countries to arrest or detain the person if spotted in their countries after which extradition or deportation proceedings can begin.