Rs 13,000 Cr PNB scam: Key accused Mehul Choksi arrested in Belgium

Guwahati, Apr 14: Absconding diamond trader Mehul Choksi has been arrested in Belgium in connection with the Rs 13,000 crore Punjab National Bank (PNB) loan fraud case, reports confirmed on Monday.

Choksi, who has been a key figure in the massive fraud alongside his nephew Nirav Modi, was detained on Saturday. His arrest followed a formal extradition request from Indian agencies, including the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).

Choksi was located in Belgium last year, where he had travelled for medical treatment. Since 2018, Choksi has been living in Antigua after fleeing India, and he is believed to owe more than Rs 6,000 crore to 34 Indian banks.

Despite the withdrawal of the Interpol Red Notice against him, Indian authorities continued to pursue his extradition through diplomatic and legal channels.

As part of the process, they shared two open-ended arrest warrants, issued by a special Mumbai court in 2018 and 2021, with Belgian counterparts.

Following his arrest, formal paperwork is being processed, and Choksi may seek bail on health grounds, according to reports.

The CBI and ED had booked Choksi, Modi, their family members, employees, and several PNB officials in 2018 for their involvement in the massive loan fraud.

The case alleges that Choksi, through his company Gitanjali Gems, colluded with certain PNB officials to fraudulently obtain Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs), causing significant losses to the bank.

The CBI has filed at least two charge sheets, and the ED has submitted three prosecution complaints against Choksi.

Investigations revealed that in March-April 2017, PNB’s Brady House branch issued 165 LoUs and 58 FLCs fraudulently, leading to the discounting of 311 bills.

None of these transactions adhered to the bank’s official sanctioning or documentation protocols, facilitating the large-scale fraud.

Meanwhile, Nirav Modi, who also faces charges in the same case, has been in a London jail since his arrest in 2019, continuing to contest his extradition to India.

With inputs from agencies