 "Mehul Choksi arrested in Belgium, likely to be extradited: Why the diamond trader is wanted in India")
After Tahawwur Rana, is India finally going to get its hands on Mehul Choksi, the fugitive diamond trader wanted in the Punjab National Bank (PNB) loan fraud case? On Saturday (April 12), it seemed more plausible after the Belgian police arrested the diamond trader at the behest of the Central Bureau of Investigation (CBI) and is still in jail.
The move comes after media reports earlier confirmed that the businessman is living in Antwerp with his wife, Preeti Choksi, after obtaining a residency card there. He had moved to the European country from the Caribbean nation of Antigua and Barbuda, citing medical reasons.
India has been seeking his extradition after he, along with his nephew, jeweller Nirav Modi, fled India in January 2018 before the Punjab National Bank loan fraud case came to the limelight.
Arrest of Choksi in Belgium
At the behest of the CBI, the Belgian police arrested Choksi in Antwerp on Saturday. The arrest comes after Belgium had confirmed to India in late March that the 65-year-old diamond trader was in the country, writing in a communique that they “were aware of his presence and attached great importance and attention to it”.
Indian authorities had then requested their Belgian counterparts to initiate his extradition to India, Associated Times, a media outlet that focuses on the Caribbean region, said.
On his arrest on Saturday, the Belgian police referred to two open-ended arrest warrants issued against him by a Mumbai court. These were dated May 23, 2018, and June 15, 2021.
However, Choksi is expected to seek bail and an immediate release, citing ill health and other reasons.
Punjab National Bank Scam whistleblower Hariprasad SV said that it will be very difficult for India to get Choksi back home as he will employ the best lawyers in Europe to avoid the process. Speaking to ANI, Hariprasad recalled the time when Choksi succeeded in evading the process when he was caught in Dominica.
“Extradition is not an easy task. Choksi’s wallet is full, and he will employ the best lawyers in Europe to avoid the process like what Vijay Mallya has been doing. I don’t think it is going to be easy for India to get him back,” he said.
“When he was caught in Antigua and other islands, he could manage to get out of it because he has a fleet of lawyers. But I wish and hope that this time, the Indian government will succeed,” Hariprasad said.
Choksi, reportedly, moved to Belgium from Antigua and Barbuda after he was granted an ‘F Residency Card’ by Belgian authorities on November 15, 2023. According to the Associated Times, the diamond trader obtained the residence card by allegedly providing “false declarations” and “forged documents” to Belgian authorities. Moreover, he also failed to disclose his existing citizenship in India and Antigua.
Mehul Choksi on the run
Sixty-five-year-old diamond trader Choksi is the owner of Gitanjali Group, a retail jewellery firm with 4,000 stores in India. It is reported that Choksi, whose father and uncles were also jewellers, always wanted to be the Vijay Mallya of the diamond world.
He chased the larger-than-life image by hiring actresses and models to push his ornaments, sponsoring horse races at the turf clubs and even hiring French executives to add sheen to his sales and marketing, reported Pavan Lall for Business Standard.
In 2018, it all came crumbling down for Choksi when he was first implicated in the alleged fraud against PNB in which the CBI alleges that he and his nephew, Nirav Modi, allegedly siphoned off Rs 13,850 crore of public money using fraudulent letters of undertaking — making it one of the biggest scams in Indian banking history.
Shortly before he was implicated in the fraud in January 2018, he and his relatives flew out of India with it later being found that he had applied for Antiguan citizenship in May 2017.
On January 15, 2018, he took the oath of allegiance to Antigua and was living there since.
However, in 2021, he went missing from Antigua and was soon found in Dominica, another Caribbean island nation. According to reports, Choksi decided to flee from Antigua to Cuba in order to avoid extradition to India. But, his plans went awry and he was captured by Dominican authorities when en route to Cuba.
Later, in 2023, he was granted residency in Belgium. In an attempt to evade India’s justice system, he then made plans to relocate to Switzerland claiming he was seeking medical treatment at Hirslanden Klinik Aarau, a well-known cancer hospital.
Mehul Choksi and the PNB scam
While famous, Mehul Choksi became a household name in India in the beginning of 2018 when the CBI and the Enforcement Directorate booked him, his nephew, Nirav Modi, and several officials of PNB for defrauding the bank to the tune Rs 13,850 crore.
It was found that they allegedly used a letter of undertaking (LoUs) and foreign letters of credit (FLCs) by bribing officials of the bank’s Brady House branch in Mumbai. He later used it to secure overseas credit from foreign banks.
An LoU is a guarantee issued by a bank that allows the bank’s customer to raise short term credit from a foreign branch of another Indian bank. The fraud lies in the fact that there were no securities kept in places before the LoUs were issued to Choksi’s companies.
It is reported that PNB isn’t the only entity to be an alleged victim of Choksi. According to media reports, Gitanjali Gems also fell behind on payments for loans obtained from ICICI Bank, IDBI Bank, and the Life Insurance Corporation of India (LIC). Additionally, it was determined that Choksi’s jewellery store violated various FEMA regulations.
Choksi is being prosecuted under the Prevention of Money Laundering Act, along with various provisions related to cheating, criminal conspiracy under the Indian Penal Code, and sections of the Prevention of Corruption Act.
However, the PNB issue wasn’t his first brush with the law. In July 2013, the National Stock Exchange (NSE) in consultation with Sebi had debarred Choksi, among others, from trading, for securities market violations relating to trading in his company, reported the Indian Express.
While India has been working hard to extradite Choksi, the jeweller through his lawyers has been arguing that he was suffering from blood cancer and unfit for travel. But, Indian officials have countered, stating that if Choksi was capable of flying from Antigua to Belgium for medical treatment, he could also return to India, where adequate care was available.
Meanwhile, his nephew, Nirav Modi, remains in a UK prison as he continues to contest extradition proceedings initiated by Indian authorities.
With inputs from agencies
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