The ruling came on an insolvency petition ICICI Bank filed around two years ago against the company, which was also allegedly involved in a money laundering case reported at the
. The court appointed Santanu Ray, a partner from Delhi-based AAA Insolvency Professionals LLP as the liquidator.
“In view of the decision of the CoC, we are inclined… to initiate liquidation process against the Corporate Debtor,” the dedicated insolvency court said in an order released on Sunday. “Accordingly, the Adjudicating Authority Orders for initiation of Liquidation of the Corporate Debtor.”
ICICI Bank did not immediately comment on the matter.
Nakshatra World, a jewellery design distribution firm, was going through an insolvency resolution process since January 2019. However, no resolution could take place as all the assets were attached by the Enforcement Directorate under the Prevention of Money Laundering Act.
Two other group companies including Gitanjali Gems and Nakshatra Brands are also pending with the same bench as the Committee of Creditors has filed applications for liquidating them.
Judges Ravikumar Duraisamy and HP Chaturvedi headed the bench that passed the order.
In January 2018, the Central Bureau of Investigation (CBI), while investigating a complaint by state-owned Punjab National Bank, had unearthed a fraud amounting to around ?14,357 crore allegedly perpetrated by companies promoted by Choksi and his nephew Nirav Modi.
Choksi, the founder of Gitanjali Gems came under the radar of the agencies after the alleged issuances fraudulent letters of undertaking at PNB’s mid-corporate branch at Brady House in Mumbai.
A consortium of 31 banks has filed claims for ?5,280 crore on the Gitanjali group of companies.
“We will make all efforts to unlock the assets mortgaged to financial creditors by using our experience of other companies such as Nirav Modi, Vikram Kothari, REI Agro, Varrsana Ispat Limited etc. in expediting the de-attachment and sale of the assets for distribution to stakeholders,” said Anil Goel, founder of AAA Insolvency Professionals LLP.
The resolution process of the Nakshatra World was quite a task. Even the ministry of corporate affairs had filed an application against the company seeking directions for recovery of amounts in the financial fraud.
Following this, the Tribunal passed an ex-parte order whereby the company was “injuncted from removal, transfer or disposal of fund and assets”. Since the properties and assets were under the control and custody of the authorities, the resolution professional could not carry out the effective resolution process.
Ray, the appointed liquidator is also handling the liquidiation of Firestar Diamond International, a Nirav Modi group company along with several others.