Mehul Choksi arrested in Belgium as India pushes for extradition

Fugitive diamantaire Mehul Choksi has been arrested by law enforcement authorities in Belgium. Choksi, who has been evading authorities since 2018, is wanted in India for his involvement in the multi-billion dollar Punjab National Bank (PNB) fraud case.

Choksi, along with his nephew Nirav Modi, is accused of defrauding PNB of ₹13,850 crore. The arrest is seen as a significant step in India's ongoing efforts to bring the duo to justice. Choksi had fled India in 2018, initially traveling to the United States before relocating to Antigua. He later sought refuge in Belgium after allegedly trying to flee to Cuba but was detained.

PTI reported, citing sources, that Choksi, 65, was arrested in Belgium on Saturday after local authorities confirmed his presence in the country. 

After the Interpol Red Notice against Choksi was “deleted,” Indian agencies, including the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI), moved forward with the extradition process to bring him back to India, PTI reported.

Reactions from Indian Authorities

PNB scam whistle-blower Hariprasad SV said, “It's great news. We are very glad for all those people who were cheated by Mehul Choksi. It's also important that we not only get him back to India but also get back the money he looted; that is what India needs. The process we have to follow when we are dealing with a foreign country depends on the country that we are dealing with. The laws and the legal systems are going to take place. It takes a lot of time, but I hope they can get him back. That's only hope because he's not going to take it easy.”

He added, “He has a fleet of lawyers from the best of the world. First of all, he has a lot of money. It's only in 2016 that he stashed away at least two billion dollars. I don't know how much he must have multiplied that.”

Also Read: Fugitive businessman Mehul Choksi living in Belgium’s Antwerp, India requests extradition: Report

Choksi, along with his nephew Nirav Modi, and several others, including bank officials and employees, were accused of fraudulently obtaining Letters of Undertaking (LOUs) and Foreign Letters of Credit (FLCs) from PNB's Brady House branch in Mumbai. These actions led to a significant loss for the bank.

Minister of State for Finance Pankaj Chaudhary on Monday lauded the arrest of fugitive Indian businessman Mehul Choksi in Belgium, stating that it was a "very big achievement".

Speaking to ANI, Chaudhary reaffirmed Prime Minister Narendra Modi's commitment to bringing back the culprits who have looted the country's money.

"Prime Minister Narendra Modi had already said that those who have looted the money of the poor will have to return it. And action is being taken against such people in the country. Mehul Choksi has been arrested; it is definitely a very big achievement," Chaudhrary stated.

Background on Mehul Choksi and the PNB Scam

The ED has filed three charge sheets against Choksi, while the CBI has filed similar charges in connection with the scam. The investigation into the Gitanjali Gems firm, owned by Choksi, continues as Indian authorities seek to hold those involved accountable for the massive financial fraud.

As part of its formal extradition request, Indian agencies have shared at least two open-ended arrest warrants issued by a special court in Mumbai—one in 2018 and another in 2021—with Belgian authorities, according to PTI citing sources.

These warrants were issued in connection with Mehul Choksi’s alleged involvement in the ₹13,850 crore PNB fraud case. Following his recent detention in Belgium, Indian agencies are now working on completing the necessary paperwork, anticipating that Choksi may seek bail on health grounds, citing his blood cancer treatment in Antwerp, PTI reported.

Nirav 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.

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.

In this case, PNB issued LoUs without proper sanction or collateral, allowing firms linked to Mehul Choksi and Nirav Modi to raise substantial foreign credit. Based on these guarantees, several international branches of Indian banks and foreign banks lent money, including:

SBI, Mauritius

Allahabad Bank, Hong Kong

Axis Bank, Hong Kong

Bank of India, Antwerp

Canara Bank, Manama

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 ₹6,344.97 crore (USD 965.18 million), 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 also attached or seized assets worth ₹2,565.90 crore in the case against Choksi, and the court has allowed "monetisation" of all these properties, PTI reported.

(With inputs from PTI)