US bankruptcy court allows Nirav Modi firms to sell assets
MUMBAI/BENGALURU: A US bankruptcy court on March 29 allowed Nirav Modi’s Firestar Diamond and other related companies to sell their assets.
The court has invited bids for assets of the distressed companies till April 27 and auction of the assets will begin on May 5.
This may come as a setback to Punjab National Bank (PNB), which in a hearing on March 28 had opposed the sale on the ground that a truncated sale will limit the recovery of creditors.
An email sent to a spokesperson for PNB was not answered till press time.
PNB, which is facing a liability of ₹12,636 crore because of the alleged fraud by Nirav Modi and Mehul Choksi firms, had told the court that Modi’s firms have not provided information that any of the assets to be sold were obtained with funds fraudulently obtained from PNB or whether the debtors were otherwise used to launder funds.
“The court having conducted a hearing on March 28, 2018, at which time the Court considered, among other things, the bidding procedures, any objections thereto and the oral arguments of counsel; and it further appearing that the relief requested is reasonable and necessary to protect the interests of the debtors, their estates, and creditors,” the US court had said in the order dated March 29.
The court also ruled that the distressed companies have demonstrated sufficient business reasons for the court to approve the bidding and auction of its assets.
The court will conduct the sale hearing on May 15.
While the court did not rule in favour of PNB’s objections, the public sector bank can again submit its objections before the sale hearing till May 8.