PNB fraud: Government seeks power to attach perpetrators’ properties

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New Delhi | Published: April 19, 2018 5:39:10 AM

However, the tribunal had restrained the accused and 62 others associated with them from removing, transferring or disposing of funds, assets and properties of entities and individuals.

PNB fraud, PNB, government, nirav modi, propertiesThe government has partially challenged the March 23 order of the Mumbai Bench of the National Company Law Tribunal that declined attachment of personal properties of Nirav Modi, Mehul Choksi and others associated with the diamond firm. (IE)

The government has moved the National Company Law Appelate Tribunal (NCLAT), seeking its approval to attach and take over individual properties of the directors and promoters of Gitanjali Gems in the alleged Rs 11,400-crore fraud at the state-run Punjab National Bank (PNB). The government has partially challenged the March 23 order of the Mumbai Bench of the National Company Law Tribunal that declined attachment of personal properties of Nirav Modi, Mehul Choksi and others associated with the diamond firm. However, the tribunal had restrained the accused and 62 others associated with them from removing, transferring or disposing of funds, assets and properties of entities and individuals.

The Ministry of Corporate Affairs in its appeal said “the impugned order only operates to restrain alienation of assets of the concerned companies and does not apply to individual properties of the accused directors and other accused. It was argued by the applicant that in order to effectively supplement the ongoing investigation into the alleged fraud against PNB, it would be imperative that the NCLT bench at Mumbai modify the order to the extent that it will be passed under section 221, 241/242, 246 and not just under 221 of the Companies Act.”

However, NCLAT chairman SJ Mukhopadhaya during the hearing on Wednesday came down heavily on the government for failing to file an appeal against the NCLT order within the stipulated 45 days. The government representative has sought condonation of delay of six days. The matter is fixed for further hearing on April 23. To ensure effective implementation of the NCLT’s directions, the government said the execution of the NCLT order required massive coordination between numerous agencies/organisations including Sebi, IBA, RBI, CBDT, all state governments and UTs and furthermore international jurisdictions.

However, it added that the government was still earnestly working towards compliance of the impugned order, but has been facing numerous obstacles including non-availability of identity/KYC details with the banks.

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