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Bank Frauds: 18 Bizmen, 24 Firms Also Left Bankrupt Beyond PSBs

Criminal complaints of financial bankruptcy due to breach and fraud by Nirav Modi and Mehul Choksi has been filed by 24 companies and 18 businessmen who had taken franchise of their jewellery brand between 2007 to 2013
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Nirav Modi and Mehul Choksi not only took loans and promised diamonds to public sector bank but has also trapped private companies and businesses in their trap. Criminal complaints of financial bankruptcy due to breach and fraud of the two has been filed by 24 companies and 18 businessmen who had taken franchise of their jewellery brand between 2007 to 2013.

Franchisee of Choksi owned showrooms - Gitanjali and Gili in Delhi, Agra, Meerut, Bengaluru, Mysuru, Karnal and other parts of Gujarat and Rajasthan has been opened by these companies and businessmen.

FIRs are registered for the offence of criminal conspiracy, fraud and violation of the agreement by Choksi company. Choksi’s firm has not delivered the stock of diamond and other precious stones despite taking the amount between Rs 3 crore to Rs 20 crore from franchisee as the security.

Income Tax department has also said that they are evaluating the liabilities, investments, before and after tax of the companies of the Choksi.

Choksi’s firm and franchisee signed a contract for the period of three years which provided that a mandatory fixed minimum guarantee commission at 12% per annum on security deposit excluding the rent from jewellery showroom will be provided by him. However, the franchises have detected certain violations in the agreement such as they either did not replenish the stock or used to send items having prices lesser than the market rates or did not pay the rent.

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Reviewed by:
Mehak Sharma
Published on 19th Feb, 2018
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