PNB fraud: Fugitive jeweller Mehul Choksi confirms he received Antigua and Barbuda's citizenship via investment plan
Gitanjali Gems boss Mehul Choksi also said that his application was motivated by a desire to expand his business in the region
A day after the government of Antigua and Barbuda indicated that it may consider "a legitimate request" from India, and deport Mehul Choksi, who allegedly bought citizenship there, the fugitive jeweller confirmed that he received the Caribbean nation's citizenship via an investment programme.
The Gitanjali Gems boss also said that his application was motivated by a desire to expand his business in the region.
Choksi, in a statement issued by his lawyer, said that reports doing the rounds in Indian media about him applying for citizenship of that country "illegally" and about him being extradited, are wrong. He refused further comment on the matter, News18 reported.
"In January 2018, I had a need to visit the United States to receive medical treatment. I am still in a state convalescence. That being said I have decided to reside in Antigua and Barbuda, the country of my citizenship and abide by the laws of the country," Choksi was quoted as saying by News18 in his statement.
The Antigua government, on Thursday, indicated that it may consider "a legitimate request" from India, and deport Choksi, wanted by Indian authorities for supposedly colluding with billionaire diamantaire Nirav Modi to defraud Punjab National Bank (PNB) to the tune of Rs 14,000 crore.
— News18 (@CNNnews18) July 27, 2018
The Daily Observer on Thursday quoted an Antigua and Barbuda Cabinet press briefing, issued by Chief of Staff Lionel "Max" Hurst, to state that the country will make every effort “as per law” to honour a "legitimate" request from India.
The issue of Choksi, a fugitive from India involved in an alleged banking scam worth over $2 billion, getting citizenship in Antigua in November last year was discussed in a Cabinet meeting of Antigua and Barbuda government, the newspaper said.
A CBI request to issue a Red Corner Notice against Choksi is pending with the Interpol and is likely to be granted soon.
The Cabinet underlined that they do not have an extradition treaty with India and that Choksi has not been charged for any crime, it reported.
The paper also stated that the Cabinet noted that no request has been received by the Antigua and Barbuda government for any action against Choksi.
The Citizenship by Investment Unit (CIU) of Antigua faced criticism from the paper for allowing Choksi to get a passport of Antigua in November last year. The unit had informed the paper that Choksi's request was allowed after "due diligence" and detailed background check from Interpol.
The CBI has denied that Interpol ever approached it regarding background checks on Choksi, who was facing inquiries from various agencies last year.
In an editorial, the paper said, “There is a perception that the CIU's due diligence is a farce and that CIP money trumps due diligence. This is a perception that cannot be allowed to linger because it will have damaging effects on our country's reputation. The government must produce all the documentary evidence of the due diligence process so that the citizens of this country can have confidence that there is integrity to the process,”
It also noted that India is a friendly country, an "ally" and that it had helped Antigua in past on several occasions and it was a time to reciprocate.
“Beyond that, India is an ally. They have provided assistance to us in the past, and they have been tapped to provide assistance in the future. Most recently (as in April of this year), we sought their technical assistance in the areas of health and the management of public finance. Will we now turn our backs on them and give safe harbour to a fugitive from their justice system?” an editorial in the paper said.
Meanwhile, the Enforcement Directorate (ED) moved a Special court in Mumbai seeking to declare Modi and his uncle Choksi 'fugitive economic offenders' which will enable them to seize their assets in India.
Modi and Choksi are being investigated by the ED and the CBI after it was detected that they allegedly cheated the Punjab National Bank (PNB) of more than Rs 13,400 crore with the purported involvement of a few of the lender's employees.
The scam, which reportedly began in 2011, was detected in January this year, after which PNB officials reported it to the probe agencies.
Choksi and Modi fled the country in January this year nearly a fortnight before the scam was detected.
Choksi's actions show that he had planned his escape and subsequent life in advance knowing that the scam would blow up after the retirement of PNB employee Gokulnath Shetty, who was allegedly helping him with renewal of letters of undertaking, sources said.
He escaped the country on 4 January on an Indian passport and took the oath of allegiance in Antigua on 15 January, they said.
Next day, his firm approached the Brady House branch of the PNB seeking renewal and issuance of letters of undertaking which were denied as the officer concerned sought cash guarantee for issuing these notes, a CBI FIR in this connection alleged.
The executives told the officer that they have been taking these letters over last several years without any demand of such guarantee, it said.
The officer could not find instructions for such LoUs in the bank's system which led to a detailed scrutiny. It is then that the alleged scam surfaced prompting the bank to approach the CBI with a complaint and an FIR was registered on January 31.
An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant short-term credit to an applicant.
Choksi allegedly swindled Rs 7080.86 crore, making it possibly the biggest banking scam in the country, the FIR has alleged.
Choksi and his companies allegedly availed of credit from overseas branches of Indian banks using the fraudulent guarantees of the PNB given through LoUs and letters of credit issued to Brady House branch which were not repaid bringing the liability on the state run bank, the officials said.
A charge sheet filed in a special court in Mumbai after a three-and-a-month probe alleged that Shetty, a deputy manager in the PNB and arrested by the CBI, received Rs 1 crore from the companies of Choksi to issue LoUs to his companies, they said.
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