NCLT Passes Order to Liquidate Nirav’s Firm Firestar International

India’s dedicated bankruptcy court has ordered the liquidation of fugitive diamantaire Nirav Modi’s flagship firm Firestar International Private Ltd and appointed Santanu T Ray as liquidator.

Lodged in a London jail, Modi is wanted by the Enforcement Directorate, Central Bureau of Investigation agencies for allegedly defrauding the state-owned Punjab National Bank (PNB) of Rs. 13,400 crores.

“During the second CoC (Committee of Creditors) meeting held on july 15,2020, the CoC informed the IRP (insolvency resolution professional) that based upon the decision taken by the CoC members in their joint lenders meeting, they want to take the corporate debtor (Firestar Diamond) into liquidation,” the Mumbai bench of the National Company Law Tribunal (NCLT) said in a seven-page order on August 10. “A resolution for liquidation of the corporate debtor was passed by a voting share of 93.31%.”

While approaching the tribunal with the plea for liquidation, then lenders had said there were no business prospects with company.

“There is no substance in chasing the legal suits and cases for recovery. There is no point in spending good money to make efforts to recover bad money, having a very remote chance of recovery,” said the lenders. “Any resolution plan is not possible, which could enable the company to pay the entire debts.”

The division bench of judicial member HV Subba Rao and technical member Shyam Babu Gautam approved the lenders’ plea for liquidation in its order.

“We shall use our experience of other assignments such as Nakshatra World, Vikram Kothari, REI Agro and Varrsana Ispaat Limited and expedite the de-attachment and sale of the assets for distribution to stakeholders and achieve the objectives of IBC,” said Anil Goel, founder chairman of AAA Insolvency Professionals.  S-ET

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