According to sources Firestar Diamond Inc, the flagship company of billionaire Nirav Modi currently at the centre of the Punjab National Bank (PNB) scam, has filed for bankruptcy in the United States. Presently the company has listed the total worth of its assets in the range of of $50 million to $100 million.
Meanwhile according to a Reuters report citing a court filing in the Southern District Of New York Nirav Modi, and the firms he controls had allegedly leveraged the loopholes in the banking system by seeking letters of undertaking (LoU) and raising credit from foreign banks to pay its merchants. Moreover the scam which became public earlier this month, could amount Rs. 12,700 crore, PNB said. Initially PNB had estimated the fraud to be around Rs. 11,400 crore already one of the biggest frauds in the country's banking system.
Previously PNB said that it was putting in place "better checks and
balances", as investigators widened the probe into the country's
biggest-ever bank scam. Meanwhile, the Reserve Bank of India, in a statement
late on Friday, said it "has already undertaken a supervisory assessment
of control systems in PNB and will take appropriate supervisory action".
