In a major hit to Nirav Modi, a bankruptcy court in the United State has ruled out a petition of the fugitive diamond merchant and two of his associates, seeking dismissal of fraud allegations against them by the trustee of 3 entities they previously owned indirectly.
The allegations were made in a New York court by Richard Levin, the court-appointed trustee of 3 US corporations- namely Firestar Diamond, Fantasy Inc and A Jaffe, indirectly owned by 50-year-old Modi previously. Levin had also sought a minimum compensation of US Dollar 15 million for “harm” suffered by the debtors of Nirav Modi and his associates Mihir Bhansali and Ajay Gandhi.
The order was issued by Southern District of New York Bankruptcy Court Judge Sean H. Lane last Friday. This has come as a shock to the fugitive diamond trader and his associates. Ravi Batra, an Indian-American lawyer in the case, told the media that the judge in a clear decision had rejected the proposals of US trustee Richard Levine against Nirav Modi, Bhansali and Ajay Gandhi. Nirav Modi, who is currently lodged in a jail in the United Kingdom, is challenging India's attempts to extradite him to face charges of fraud and money laundering in the PNB scam case.