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Firestar bankruptcy proceedings: PNB hires lawyers to represent it in US

Firestar Diamond approached a bankruptcy court in New York court in February

Press Trust of India  |  New Delhi 

Income Tax and CBI raid Nirav Modi's Firestar Diamond company in connection with involvement in the Punjab National Bank (PNB) fraud, in Surat (Photo: PTI)

State-owned (PNB) has hired to represent itself in the proceedings of the US-based Firestar Diamond, a group company of billionaire diamantaire Nirav Modi who is accused of defrauding the lender of over Rs 130 billion.

Firestar Diamond approached a court in New York court in February.

"We have just engaged to represent our bank in the 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," Managing Director told PTI in an interview.

Without disclosing the name of the lawyers, he said the bank is legally engaged in the matter of insolvency proceedings of Firestar Diamond and the concerned authorities have been requested to make the bank a party in the case.

The Trustee Program oversees the administration of bankruptcy cases in the United States.

Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated of over Rs 130 billion through fraudulent Letters of Undertaking (LoUs).

A Mumbai branch of had fraudulently issued LoUs for the group of companies belonging to Nirav Modi since March 2011.

Different investigating agencies, including CBI and Enforcement Directorate, are probing the fraud, dubbed as the biggest banking scam in the country.

PNB had issued as many as 1,590 LoUs to Nirav Modi, Mehul Choksi and their associates.

The total number of LoUs issued to the companies of Nirav Modi, his relatives and the Nirav Modi Group are 1,213, and to Mehul Choksi, his relatives and the Gitanjali Group are 377.

First Published: Mon, April 09 2018. 00:04 IST