ICICI bank initiates lawsuit against Shrenuj and Co. to regain a debt obligation of $12 million

• The New York branch of ICICI bank has filed a case against 11 executives of Shrenuj and Co.
  
• The bank has accused promoter Vishal Doshi and 10 other executives for diverting funds worth $12 million.
  
• ICICI bank filed the case under the Racketeer Influenced and Corrupt Organization (RICO) Act.

ICICI Bank has sued 11 executives from the 100-year-old diamond house, Shrenuj and Co. for diverting funds through its US subsidiary Simon & Golub & Sons (SG). As per recent reports, the company owes a sum of $12 million (exclusive of interest and legal fees) to the bank.

The case against promoter Vishal Doshi and 10 other executives was filed by the New York Branch of ICICI bank in Southern District Court of New York under the Racketeer Influenced and Corrupt Organization (RICO) Act.

The bank suspected fraud line activities as it commenced receivership proceedings in Seattle. Prior to this, the bank had filed a petition on 4 October claiming that the series of fraud line activities had been conducted by Shrenuj and other companies related to it.

Reports also state that in 2008, the US subsidiary of Shrenuj and Co. signed a credit facility agreement worth $20 million. Further, it had a debt obligation of $18.8 million against ICICI bank in March 2016. The $18.8 million debt included a letter of credit worth $3.6 million and other credit facilities of $15.2 million.

Owing to the the insolvency declaration made by Shrenuj promoters in May 2016, the bank had to hire a receiver to resolve the debt obligation issues. Apart from ICICI Bank, Bank of India has also filed an appeal to commence insolvency proceedings as the diamond house could not service a loan worth ₹2.26 billion.