The U.S. jewelry operations of Nirav Modi, the Indian businessman arrested in London this week to face allegations of a $2 billion fraud on Punjab National Bank, are dissolving under the supervision of a bankruptcy judge in New York, WSJPro reported. Mr. Modi, who has denied wrongdoing, had been sought by Indian authorities since early 2018. Some parts of Firestar Diamond Inc. and other Modi-owned companies have been sold while in bankruptcy, but the money collected is only a fraction of what the businesses owe creditors, court records indicate. The companies sought bankruptcy protection last year after the fraud allegations. For creditors, the chief value in the bankruptcy may have been the information gathered by John Carney, a court-appointed examiner who released a detailed report last year documenting ties between the businesses and the alleged bank fraud. Mr. Carney said his probe turned up substantial evidence that Mr. Modi’s business played a role in the alleged fraud on Punjab National.
