Lenders agree to liquidate Nirav Modi's Firestar International, feel auction will delay probe

NEW DELHI: Lenders of Nirav Modi group's Firestar International agreed to liquidate the company on Thursday with over two thirds of banks voting in favour of a resolution that was initially tabled at a bankers meeting last month, according to people aware of the matter.

Punjab National Bank is the lead bank in the consortium.

The lenders will now approach the National Company Law Tribunal (NCLT) with a formal request to initiate liquidation proceedings.


The decision was taken after majority of the lenders felt that an auction process for the company would be time consuming because of the multitude of investigations running against the fugitive diamantaire, prime accused in the over $2 billion Punjab National Bank (PNB) fraud.

The company's assets are in the custody of the Enforcement Directorate after Modi was charged with offences under the Prevention of Money Laundering Act and the Fugitive Offenders Act.

This could further complicate matters making it difficult to find a suitor to take over the company as a going concern, banking sources said.

The banks are set to appoint a liquidator for the company, which is being administered by Ram Ratan Kanoongo, a court-appointed interim resolution professional. Kanoongo declined to comment.

Firestar International is the parent firm of the Nirav Modi group and has over a dozen subsidiaries located in various international jurisdictions such as Japan and Belgium.

The company was admitted for insolvency proceedings on March 17 after Corporation Bank (now merged into Union Bank of India) filed an application last year at the NCLT to recover a loan that the company had defaulted on.

PNB has filed claims of ₹11,000 crore against Firestar International for the alleged letter of undertaking fraud.