- Wednesday, April 16, 2025
Choksi, 65, is wanted in India for his involvement in the ₹138.5 billion Punjab National Bank loan “fraud” case and was arrested recently by Belgian authorities
By: India Weekly
THE ENFORCEMENT DIRECTORATE (ED) has reached out to 10 countries to confiscate the assets of absconding diamantaire Mehul Choksi, who was arrested in Belgium following an extradition request by Indian probe agencies, Economic Times reports.
Choksi, 65, is wanted in India for his involvement in the ₹138.5 billion (£1.22bn) Punjab National Bank loan “fraud” case.
The Belgian authorities arrested Choksi on Saturday based on an extradition request moved by the Central Bureau of Investigation (CBI) and the ED.
ED is seeking to liquidate Choksi’s assets and return the money to victims of the bank fraud, even as the Central Bureau of Investigation is pushing for extradition, the report stated.
The investigating agency has sent as many as 15 letters rogatory over the past few months to Hong Kong, Singapore, Thailand, the US, Belgium, China, Italy, Japan, the UK and the United Arab Emirates, formally requesting details of companies, assets, bank accounts and other information related to Choksi and his Gitanjali Group of companies.
Choksi is the second “prime suspect” in the loan fraud case, while his nephew Nirav Modi is the main suspect.
Modi, declared a fugitive economic offender, has been lodged in a London jail since he was held by the authorities there in 2019 on the basis of a legal request made by the ED and the CBI in this case. He is contesting extradition to India.
Choksi was located in Belgium last year when he went there on the grounds of getting medical treatment. He had been staying in Antigua since 2018 after leaving India.
Sources said the Interpol Red Notice against him for arrest was “deleted” sometime back by the global police body and the Indian agencies were pursuing him via the extradition route since then.
At least two open-ended arrest warrants, issued by a special court in Mumbai in 2018 and 2021, have been shared by the Indian agencies with their Belgian counterparts as part of the extradition request, the sources said.
Formal paperwork is being done following the arrest/detention. Choksi may seek bail on health grounds, they said.
Will file appeal: Lawyer
Choksi’s lawyer Vijay Agarwal said his client was taken into custody by the Belgian Police on Saturday (12).
“At the moment, he is in prison and there (Belgium), the procedure is not to apply for bail but file an appeal. During that appeal, request is made that he should not be kept in detention and he should be permitted to defend himself and oppose the extradition request while not being in custody,” Agarwal told reporters.
He said the “obvious” grounds for the appeal would be that Choksi is “not a flight risk, is extremely sick and undergoing treatment for cancer”.
He said their legal defence would be that this is a “political case and the human condition (in Indian prisons) was not good”.
Punjab National Bank fraud
Choksi, Modi, their family members and employees, bank officials and others were booked by the CBI and the ED in 2018 for perpetrating the alleged loan fraud at the Brady House branch of the Punjab National Bank (PNB) in Mumbai.
It was alleged that Choksi, his firm Gitanjali Gems and others “committed the offence of cheating against PNB in connivance with certain bank officials by fraudulently getting the LOUs (letters of undertaking) issued and got the FLCs (foreign letter of credit) enhanced without following prescribed procedure and caused a wrongful loss to the bank”.
The CBI has filed at least two chargesheets against him in this case while the ED has filed three such prosecution complaints.
According to the investigating agencies, officials at PNB’s Brady House branch in Mumbai issued 165 LoUs and 58 FLCs during March-April 2017, against which 311 bills were discounted.
These LoUs and FLCs were allegedly issued to Choksi’s firms without any sanctioned limit or cash margin and without making entries in PNB’s central banking system to evade any scrutiny in case of a default.
LoUs are a guarantee given by a bank on behalf of its client to a foreign bank. If the client does not repay the foreign bank, the liability falls on the guarantor bank.
Based on these LoUs by PNB, money was lent by SBI, Mauritius; Allahabad Bank, Hong Kong; Axis Bank, Hong Kong; Bank of India, Antwerp; Canara Bank, Manama; and State Bank of India, Frankfurt.
“Since the accused companies did not repay the amount availed against the said fraudulent LoUs and FLCs, PNB made the payment of ₹63.44 billion (£560.12m), including the overdue interest, to the overseas banks, which had advanced buyer’s credit and discounted the bills against the fraudulent LoUs and FLCs issued by the PNB,” the CBI’s supplementary charge sheet in the PNB bank fraud case alleged.
The ED has attached or seized assets worth ₹25.65 billion (£226.47m) in the case against Choksi and the court has allowed “monetisation” of all these properties.
Flat maintenance
Choksi, owns three flats in Mumbai’s upscale locality Malabar Hill and has not cleared the maintenance amount for the last seven years, a residential society member told ANI.
The fugitive businessman’s owes ₹6.3 million as maintenance dues (without calculating the interest) for his three flats in Gokul Apartments in Malabar Hill. (Agencies)
