PNB hires lawyers to represent itself in US

The Punjab National Bank (PNB) has hired lawyers to represent itself in the bankruptcy proceedings of the US-based Firestar Diamond, a group company of billionaire diamantaire Nirav Modi, accused of defrauding the lender of over ~130 billion. Firestar Diamond approached a bankruptcy court in New York court in February.

“We have just engaged lawyers to represent our bank in the US bankruptcy petition as part of recovery process. If money has gone from our system and parked in that company, our bank's views should be heard before deciding about insolvency petition,” PNB Managing Director Sunil Mehta told PTI in an interview. Without disclosing the name of the lawyers, he said the bank was legally engaged in the matter of insolvency proceedings of Firestar Diamond and the concerned authorities had been requested to make the bank a party in the case. The US Trustee Program oversees the administration of bankruptcy cases in the US. Nirav and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of over ~130 billion through fraudulent letters of undertaking. A Mumbai branch of PNB had fraudulently issued LoUs for the group of companies belonging to Nirav since March 2011. The total number of LoUs issued to the firms of Nirav Modi, his relatives and the Nirav Modi Group are 1,213, and to Choksi, his relatives and the Gitanjali Group are 377.