PNB fraud: Banks may liquidate Nirav Modi's Firestar International

NEW DELHI: Banks are weighing liquidation of Nirav Modi group’s parent company Firestar International after the proposal was deliberated upon at a creditors meeting on Friday, said sources aware of the developments. The lenders are divided over the future of the company as the Enforcement Directorate has initiated proceedings under the Prevention of Money Laundering Act (PMLA) against the Nirav Modi group and assets of the parent company are currently in the enforcement agency’s custody.Leader of the lenders consortium, Punjab National Bank, feels the company’s assets be liquidated given the uncertainty over its future due to ongoing investigations against it though another large creditor, Bank of Baroda, expressed an opposing view, according to these sources.“There was disagreement among banks at the meeting. Some assets of the company have been seized by ED under PMLA. But these can be brought under ambit of the bankruptcy process and offered to buyers because banks have a charge on those assets,” a banker involved in the deliberations said. Banks will decide on the proposal by way of an electronic vote before July 7.Mails and text messages sent to Punjab National Bank managing director SS Mallikarjuna Rao and Bank of Baroda managing director Sanjiv Chadha did not elicit a response until press time. Spokespersons also did not respond to ET's questionnaire till press time Monday.

from Economic Times https://ift.tt/2BpVMhM