Our Bureau & Agencies
In a significant breakthrough in Rs 13,000 crore Punjab National Bank loan fraud, the Belgian police has arrested absconding diamantaire Mehul Choksi.
The arrest was carried out on the basis of an extradition request made by the Central Bureau of Investigation and the Enforcement Directorate, news agency PTI reported.
Choksi, who has been on the run for past seven years obtained citizenship of Caribbean nation Antigua in 2019. He came to Belgium a few months ago for medical treatment.
Choksi’s lawyer Vijay Agarwal said his client was taken into custody by the Belgian Police on Saturday .
“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”.
Fraud LOUs
Choksi took over family-run diamond business and made it a household name with his Gitanjali Gems brand. Choksi and his nephew Nirav Modi who is a co-accused in the case have been charged of using Letters of Undertaking to secure overseas credit for their diamond business. As per Punjab National Bank’s complaint the LOUs were issued fraudulently and in violation of Reserve Bank of India guidelines and were used to obtain credit for shell companies.
The scam had been going since 2011 and came to light when PNB executives demanded full margin money for issuing fresh LOUs. A red flag was raised and inquiry initiated after Choksi and Modi’s companies informed banks of securing LOCs without any collateral.
A case was registered against Choksi in February 2018 and chargesheets.
Subsequently in 2022 five more criminal cases were filed against Choksi and others for duping banks and other financial institutions. ED has also attached assets worth Rs 2500 crore as a part of its probe against Choksi.
Modi has been in a jail in the United Kingdom since 2019 his bail applications repeatedly turned down by courts. The Indian government has been pushing for his extradition, raising it with highest levels in the UK government.
Published on April 14, 2025