India's Ministry of Corporate Affairs (MCA) is considering legal options to try to stall bankruptcy proceedings in the US against diamantaire Nirav Modi's group firm Firestar Diamond, amid stepped up action in the over Rs 13,000 crore scam at Punjab National Bank, according to a report in moneycontrol.com.
The move comes close on the heels of the National Company Law Tribunal (NCLT) restraining more than 60 entities, including Nirav Modi, Mehul Choksi, various individuals, companies and limited liability partnership firms, from selling their assets.
A multi-agency probe, including by the Serious Fraud Investigation Office (SFIO), is progressing into the scam, the biggest so far in the Indian banking industry. Firestar Diamond that filed for bankruptcy in a US court is a subsidiary of one of the companies against whom the NCLT has passed the order. Since there is a strong possibility of fund diversion among various group entities, money could well have been diverted to Firestar Diamond. The effort would try to stall the bankruptcy proceedings so that the company's assets are not liquidated before completion of the probe into the scam.
The SFIO, which comes under the MCA, is probing 107 companies and seven Limited Liability Partnerships linked to Nirav Modi and Mehul Choksi groups with regard to the scam. Among others, the CBI and the Enforcement Directorate are also investigating the matter.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
