Nirav Modi's plea on dismissing fraud allegations rejected by court
A bankruptcy court in the United States has rejected a petition filed by fugitive Indian businessman Nirav Modi and two of his associates, seeking the dismissal of fraud allegations against them. The allegations were leveled by Richard Levin, the court-appointed trustee of three US corporations - Firestar Diamond, Fantasy Inc., and A Jaffe. Modi and his associates earlier indirectly owned these firms. Here's more.
The order was issued by Southern District of New York Bankruptcy Court Judge Sean H Lane. Levin had sought a minimum compensation of $15 million for losses suffered due to Modi and his associates, Mihir Bhansali and Ajay Gandhi. "Judge Lane in a clear decision denied defendants Modi, Bhansali and Gandhi's motions to dismiss US Trustee Richard Levin's amended complaint," said attorney Ravi Batra.
According to the court order, Modi and his associates planned a scheme to falsely obtain loans from several banks, including the Punjab National Bank (PNB), during 2011-2018. The accused used a web of shell companies based in Hong Kong and Dubai to create fake import transactions and launder the proceeds, it said. The judge noted that the fraud amounted to over $1 billion.
"To get the ill-gotten funds by bank fraud out of his companies, he (Modi) engaged in a separate fraud to hide those withdrawals for personal benefit as if they were ordinary business transactions," attorney Batra said, according to news agency PTI.
Modi, 50, is accused in the Rs. 14,000 crore PNB scam case, facing allegations of criminal conspiracy, cheating, corruption, money laundering, among others. He is currently lodged in a jail in the United Kingdom and challenging India's attempts to extradite him. Earlier this year, the London High Court had granted him permission to appeal against his extradition. That ruling is currently under review.