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Buyers express strong interest in Nirav Modi's 'bankrupt' Firestar Diamond

The Central Bureau of Investigation has so far arrested at least 13 people - seven from the bank and six more from Modi and Choksi's companies

Reuters  |  New Delhi 

Nirav Modi had attributed his inability to pay the dues to PNB's haste in going public about the matter. File photo
Nirav Modi had attributed his inability to pay the dues to PNB’s haste in going public about the matter. File photo

Potential buyers have expressed strong early interest in a bankrupt US firm of Nirav Modi, who has been accused of involvement in a $2-billion fraud in India, court filings in show.

Firestar filed for bankruptcy protection on February 26 in the United States, following accusations that other firms led by Modi and his uncle colluded with officials of state-run to secure unauthorised loans between 2011 and 2017.

Modi and his uncle Mehul Choksi, owner of Ltd, left in January before the fraud came to light, but have said in letters and statements they are innocent.

Indian investigators have, however, attached or seized assets belonging to Modi and his companies. Firestar is not named in the police complaint.

"Early expressions of interest in purchasing some or all of the debtors' business operations have been strong," Firestar Diamond said in a court filing on Wednesday.

It has also told secured lenders it was in discussions with lenders for debtor-in-possession financing as it weighed options.

Firestar Diamond and its affiliates had annual sales of around $90 million, with clients such as Costco Wholesale, Macy's and JC Penney Co Inc, it said.

The has so far arrested at least 13 people - seven from the and six more from Modi and Choksi's companies. Investigators have also seized a number of properties from the two, including jewellery and luxury vehicles.

"Among the properties seized and businesses closed were factories in which produced most of the fine jewellery merchandise sold by the debtors to their customers," Firestar said in its filing.

The Indian units had provided some back office and support functions, it said, adding, "The sudden loss of its supply chain and back office support has dramatically impacted the operations of the debtors in the short term.

Firestar Diamond was formed as a corporation in 2004 under the name Solutions International. Its name was changed to Next in 2005 and again in 2007 to Firestone Inc, before taking its current name in 2011.

The company is a wholly of Firestar Group, which in turn is wholly owned by Both are incorporated.

Synergies are then wholly owned by Firestar Holdings Ltd, a Hong Kong corporation, which is then wholly owned by Modi's Indian company Firestar International Ltd, according to the filing made in the Bankruptcy Court Southern District of

Separately, the Enforcement Directorate, which targets offences involving foreign exchange and money laundering, said on Thursday it had seized 41 properties, worth about 12 billion rupees ($184.16 million) belonging to Choksi and companies he controls.

Among the properties are apartments and office spaces in key Indian cities, the Enforcement Directorate, added.

First Published: Thu, March 01 2018. 20:56 IST