The Punjab National Bank is the lead bank of the consortium.
Lenders will now apply to the National Company Law Tribunal (NCLT) to formally request it to initiate liquidation proceedings.
The move came after the majority of lenders estimated that an auction process for the company would take time due to the multitude of investigations against the fugitive diamond dealer, the main accused of fraud over $ 2 billion. dollars to the Punjab National Bank (PNB).
The company’s assets are in the custody of the Enforcement Directorate after Modi was charged with offenses under the Prevention of Money Laundering Act and the Fugitive Offenders Act.
This could complicate matters further, making it difficult to find a suitor to take over the business as a going concern, banking sources said.
The banks are about to appoint a liquidator for the company, which is administered by Ram Ratan Kanoongo, a court-appointed interim resolution professional. Kanoongo declined to comment.
Firestar International is the parent company of the Nirav Modi group and has over a dozen subsidiaries located in various international jurisdictions such as Japan and Belgium.
The company was admitted to insolvency proceedings on March 17 after Corporation Bank (now merged with Union Bank of India) last year filed with the NCLT to collect a loan on which the company had been lacking.
PNB has filed claims of ₹ 11,000 crore against Firestar International for the alleged fraud engagement letter.