After six years of investigation against fugitive diamantaire Mehul Choksi-promoted firm Gitanjali Gems, the Serious Fraud Investigation Office (SFIO) has decided to drop charges against almost five dozen parties, including individuals and companies.
The list of 60 individuals and parties includes Nirav Modi’s wife Ami, his children Rohin, Ananya and Apasha and brother Nehal Modi along with his firms Firestar Diamond Pvt. Ltd and Firestar Diamond FZE among others. The list of respondents against whom the federal investigation agency has dropped charges also includes Punjab National Bank.
However, the cases and proceedings will continue against the primary accused Mehul Choksi and Nirav Modi in the case.
“Named party respondents are discharged, as no prayers are stated to be pressed against them in view of the SFIO Investigation report received in the matter,” observed the Mumbai bench of the National Company Law Tribunal (NCLT) in its order. “Accordingly, the party respondents shall have no bar in dealing with their movable or immovable properties in any manner from the date of this order,” added the tribunal in its December 6 order.
The order also clarified that the concerned authorities are directed to release the movable or immovable properties of the above-named respondents, placed under restraint by them in compliance with the aforesaid order with immediate effect.
“Six years is a long time when prohibitory orders hurt ordinary business and personal life,” said Nipun Singhvi, managing partner of law firm NSA Legal. “Deletion of parties from prohibitory orders passed by NCLT will be a sigh of relief for people who don’t have any nexus to the alleged breaches. However, a blanket ban on the sale or purchase of properties should be relooked as the same leads to undue harassment of parties such as unconnected independent directors,” adds Singhvi.
In 2018, the CBI unearthed a bank fraud of Rs 14,357 crore on a complaint filed by Punjab National Bank. Mehul Choksi and his nephew Nirav Modi are among the key accused in the case. Subsequently, multiple investigation agencies including SFIO, ED and the revenue department initiated a probe into the matter.
Ashish Pyasi, partner at law firm Aendri Legal said this (order) has come after several years as investigations take time but still this will give respite to the parties as orders were passed in the past putting restrictions on them and now those restrictions have been set aside.
“It appears that initially, the government made several persons and entities as a party to the petition which included independent directors and people who may not have any involvement,” said Pyasi.
In February, the tribunal ordered the liquidation of Gitanjali Gems and appointed Santanu T Ray as the liquidator. The company was originally admitted under the Corporate Insolvency Resolution Process (CIRP) in October 2018. It has admitted liabilities of over Rs 12,558 crore.
The development came around the same time when the Enforcement Directorate (ED) began restitution of assets worth over Rs 2,500 crore as part of a money laundering investigation against Choksi in connection with the alleged loan fraud case.
