Not able to release money from Nirav Modi's firm, banks tells PMLA court

The court had back in 2021 asked the banks to release the money to the NCLT -appointed liquidator

In a fresh development in the diamantaire Nirav Modi case, two banks told the special PMLA (Prevention of Money Laundering Act) court that was hearing the case that they were unable to release the money in the account of Firestar International Limited, a company owned by disgraced fugitive diamond trader, a report in Hindustan Times said.

The banks' response were in reply to an affidavit by the official liquidator who had claimed that 3 of the banks in the case had not released Rs. 37 crore from the firm's accounts for recovery of debts. The official liquidator was appointed by National Company Law Tribunal.

The affidavit which was filed in October 2023 said the company had a deposit of Rs. 2.67 crore with Kotak Mahindra Bank, Rs. 17.98 crore with Union Bank of India and Rs. 16.32 crore with Bank of Maharashtra.

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The court had back in 2021 asked the banks to release the money to the liquidator but when the latter's officials reached out to the banks, they said they were unable to do as directed.

Kotak Mahindra Bank on Thursday said that the firm's account had been first attached by the Income Tax department and then a day later by the Enforcement Directorate to probe charges of money laundering against Modi and his Firestar group firms. The bank said that the I-T department had also issued a notice to clear dues Firestar owed them, following which the Bank had made the payment from the company’s account since they were statutory and there would have been consequences if the dues were not cleared.

Kotak Mahindra said a demand draft of Rs. 2.46 crore was issued in favour of the department.

Bank of Maharashtra has said that the money held in the firm’s credit balance had been adjusted against a loan account and the Union Bank of India is yet to file a reply on the issue.
Incidentally, the liquidator had said that the banks should not have touched the money from the account of Firestar group.

The PMLA court has said it will pass orders on the case on February 23.