Gitanjali Gems headed for liquidation

MUMBAI: Gitanjali Gems, a BSE listed jewellery retailer promoted by absconding businessman Mehul Choksi, is headed for liquidation after most of its lenders decided not to extend a 180-day deadline to complete its corporate insolvency resolution process. The committee of creditors (CoC) of Gitanjali Gems rejected the proposal to extend the resolution process with 54.14% voting at a meeting held on March 28, Vijay Kumar Garg, resolution professional (RP) of the jewellery said in a stock exchange filing on Wednesday.

“Since extension is not approved by the CoC, the next logical step would be to go for liquidation of the company,” he said.

The period of 180 days of corporate insolvency resolution process ended on April 6.


On October 2018, Mumbai bench of National Company Law Tribunal (NCLT) had admitted the insolvency plea filed by ICICI Bank. The private sector lender had approached the tribunal after the company had defaulted on dues of around Rs 890 crore.

This was the first insolvency petition filed by the lender since government agencies launched a probe against Choksi and his nephew Nirav Modi for allegedly defrauding Punjab National Bank of over $2 billion.

As per Gitanjali’s exchange filing, it owes around Rs 12,558 crore to its consortium of lenders. These dues were in the form of working capital loans as well as external commercial borrowings (ECBs).

Currently, ICICI Bank has 7.9% voting share in the CoC while PNB has exposure of over Rs 5,518 crore and 43.94% voting rights.

According to a person involved in the insolvency process, the investigation agencies have seized stocks, movable and immovable assets and the lenders will try to recover their dues from that.