Mehul Choksi arrested: Ministry of External Affairs spokesperson Randhir Jaiswal on Thursday informed that India was working closely to extradite fugitive diamond trader Mehul Choksi from Belgium. “Based on our extradition request, he was arrested. We are working closely with the Belgium side on his extradition,” Jaiswal said on Thursday. Indian jeweller Mehul Choksi, who has been accused of involvement in one of India’s biggest bank frauds, was arrested in Belgium on April 14.
Mehul Choksi and his diamond tycoon nephew Nirav Modi are accused of a ₹13,500-crore bank loan fraud involving Punjab National Bank, India’s second-largest public lender. Both fled India in 2018.
Choksi is wanted by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
Mehul Choksi was arrested on Saturday in the Belgian port city of Antwerp, one of the most important diamond trading hubs in the world. His lawyer, Vijay Aggarwal, told reporters that Choksi’s legal team would file an appeal for his release.
What is Mehul Choksi accused of?
Punjab National Bank accused Mehul Choksi, Nirav Modi and others of fraud by using fake financial documents to get loans to buy and import jewels.
Coming from a family of diamantaires, Mehul Choksi transformed his inherited business by rapidly expanding the Gitanjali Group’s footprint across India and internationally, establishing a network of luxury jewellery stores under various brands.
Alongside his nephew Nirav Modi, Choksi invested heavily in high-profile marketing and advertising campaigns, enlisting international celebrities such as Kate Winslet and Rosie Huntington-Whiteley to endorse their brands and elevate their global appeal.
Much of the extravagant expansion by Mehul Choksi and his nephew Nirav Modi was financed through loans from Punjab National Bank (PNB). According to investigations by the CBI and the ED, between 2014 and 2017, instead of repaying these loans, the duo fraudulently obtained Letters of Understanding (LoUs) from PNB’s Brady House branch in Mumbai.
This was done in collusion with certain Punjab National Bank officials, allowing Choksi and Modi to bypass standard banking procedures and secure credit without proper collateral or documentation, thereby defrauding the bank of substantial sums.
The two diamantaires fraudulently got LoUs issued from the Brady House branch of the PNB in Mumbai. These LoUs were used to avail credit on foreign shores to fund their business and build personal assets.
While the LoUs were supposed to be repaid within three months, they were merely renewed with interest by bank officials. This kept a continuous flow of liquidity for the two jewellers even as the debt kept piling up.
By the time the PNB discovered the irregularities and approached the CBI, both Choksi and Modi had fled the country, after setting the bank back by over ₹13,500 crore. Choksi alone stands accused of defrauding the bank of more than ₹6,000 crore.
Nirav Modi, who built an international jewellery empire that stretched from India to New York and Hong Kong, was arrested in Britain in 2019. He has been in prison since then.
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