The fugitive Indian businessman and former chairman of the Gitanjali Group, was arrested in Belgium following a request from India’s Central Bureau of Investigation (CBI). This marks a significant development in the long-running efforts to bring Choksi to justice over his involvement in the multi-crore Punjab National Bank (PNB) fraud case.
Who is Mehul Choksi?
Mehul Choksi, born in 1959, was a prominent figure in India’s diamond and jewelry industry and the former chairman of Gitanjali Group. His reputation, however, crumbled after he was named as a key accused in the PNB fraud case, which is one of the largest financial scams in India’s banking history.
Choksi fled India in January 2018, just before the PNB scam was exposed. Initially, he traveled to the United States and later settled in Antigua and Barbuda after acquiring citizenship there in 2017.
The PNB Scam: A Timeline
The PNB scam took place between 2014 and 2017, with Choksi, his nephew Nirav Modi, and several bank officials allegedly obtaining fraudulent Letters of Undertaking (LoUs) and Foreign Letters of Credit. These documents, which are typically used to obtain credit from overseas banks, were issued without proper collateral or documentation.
The scam came to light in early 2018, triggering investigations by India’s CBI and Enforcement Directorate (ED). Nirav Modi was arrested in London in May 2019, and Choksi has remained a fugitive since fleeing India.
What Was the Scam?
The scam involved fraudulent dealings in the amount of Rs 13,850 crore, one of the largest financial frauds in India’s banking sector. Choksi and Modi used LoUs obtained from PNB’s Mumbai branch to secure loans without proper banking procedures. The loans were rolled over multiple times, inflating the total debt.
The fraud primarily affected PNB, with around Rs 6,097 crore linked to Choksi’s Gitanjali Group and Rs 6,498 crore to Modi’s companies.
Legal Action and Assets Seized
In the aftermath of the scam, Indian authorities took aggressive actions to recover the defrauded funds. The ED seized assets linked to Choksi’s Gitanjali Group, amounting to over Rs 2,565 crore. This included luxury vehicles, properties, and shares. The agency also filed prosecution complaints against Choksi as the case remains under active investigation.
Choksi’s Arrest in Belgium
Choksi, who had relocated to Belgium in 2024 for medical treatment, was arrested by Belgian authorities on a Saturday. This came after the confirmation of his presence in the country and a request from the CBI. Choksi had cited blood cancer as the reason for his medical stay in Belgium and was living there with his wife, a Belgian citizen.
The arrest in Belgium is seen as a breakthrough in India’s efforts to bring him back, although Choksi is expected to mount a legal defense. He plans to apply for bail and oppose extradition, citing his medical condition and citizenship in Antigua as grounds for staying in Belgium.
What Lies Ahead?
While the arrest is a significant step forward, the legal battle is likely to be prolonged and complex. Choksi’s legal team is expected to challenge the extradition request, particularly after the revocation of the Interpol Red Corner Notice against him in March 2023.
Meanwhile, his nephew Nirav Modi remains in custody in the UK, awaiting extradition proceedings to India. The outcome of Choksi’s case could set a precedent for future extraditions of high-profile fugitives from abroad.
