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Firestar Diamond Work Plan Filed

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Firestar Diamond’s examiner John J. Carney filed with the U.S. Bankruptcy Court a preliminary work plan and budget.

The documents filed with the Court explain, “The Examiner Order broadly sets forth the scope of the Examiner’s investigation.  The Examiner is directed to: investigate the circumstances surrounding the alleged fraud involving the individual known as Nirav Modi, certain persons or entities affiliated with Nirav Modi (the ‘Modi Entities’) and certain employees of Punjab National Bank (the ‘Alleged Fraud Circumstances’) for the purpose and to the extent necessary to determine (1) whether and to what extent, if any, the Modi Entities have the ability to direct and/or influence the conduct, decisions or actions taken by the Debtors in these Cases; (2) whether any current officer or director of the Debtors actively and knowingly participated in fraud or dishonesty in the management of the affairs of the Debtors; (3) whether any claims or causes of action in favor of the Debtors may arise from the Alleged Fraud Circumstances; (items (1) through (3) referred to as the ‘Determinations’) and (4) otherwise perform the duties of an examiner as contained within the scope of 11 U.S.C 1106(a)(3)&(4) of the Bankruptcy Code solely to the extent required or necessary to the foregoing Determinations, (collectively, the ‘Investigation’)

The Examiner plans to divide the Investigation into several categories: a. Conduct initial interviews to understand the Debtors’ operations and the Debtors’ respective roles in the diamond/jewelry industry; b. Interview key witnesses in the United States, and if necessary in India, who are or were employed in functions relevant to the Investigation, i.e. sales, finance and  accounting, operations, and contracting; c. Identify and review documents and communications relevant to the subject matter of the Investigation; d. Conduct a forensic financial analysis of the books and records of the Debtors, bank records, vendor records, and any and all relevant information of other entities consistent with the Investigation, and trace the movement of monies obtained under the Alleged Fraud Circumstances against Punjab National Bank to the Debtors, and related entities and individuals; and e. Engage with the Indian Ministry of Corporate Affairs (and other agencies within the Government of India if needed) for information and documents relevant to this Investigation.” The Court scheduled a May 14, 2018 hearing to consider the motion with objections due by May 11, 2018.

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