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Jewelry Firm Files for US Bankruptcy As Owner Is Investigated for Fraud

Published

6 years ago

February 27, 2018

INSTORE Staff

Liabilities are in the $50M to $100M range.

Bloomberg reports that Firestar Diamond Inc. has filed for Chapter 11 bankruptcy protection in New York.

The company is among the holdings of billionaire Nirav Modi, who is being investigated by Indian authorities in connection with a massive bank fraud case.

Firestar listed both its assets and liabilities at “$50,000,001 to $100 million.” The company’s business model “begins with procurement of raw materials and extends to the design, manufacture, distribution, and after-sales service of diamond-studded jewelry,” according to its website.

Bloomberg reports that in a U.S. Bankruptcy Court filing, Firestar “blamed liquidity and supply chain challenges” for the bankruptcy. Two of the company’s affiliates — Fantasy Inc. and A. Jaffe Inc. — are also part of the filing.

The firm told Bloomberg that Firestar is not connected to the case in India.

The case centers on Punjab National Bank, where employees are “suspected to have steered fraudulent loans” to Modi’s businesses, according to Reuters. Modi is founder of the Nirav Modi diamond jewelry house based in Mumbai.

Bloomberg reports that Punjab National Bank officials now estimate the scope of the fraud at $2 billion, up from an earlier estimate of $1.8 billion.

Read more at Bloomberg

Related Topics: diamonds Firestar Nirav Modi

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