Fugitive diamond merchant Mehul choksi, one of the key accused in the ₹13,850 crore Punjab National Bank (PNB) fraud, has been arrested in Belgium. He is currently lodged in a Belgian jail as local authorities initiate proceedings that could potentially lead to his extradition to India.
Choksi’s arrest is a significant development in India’s long-running efforts to bring back the key conspirators in what remains the country’s biggest banking fraud. But what is the PNB scam and what was Choksi’s alleged role in it?
Who is Mehul Choksi?
Born on May 5, 1959, in Mumbai, Choksi is the former chairman of the Gitanjali Group, a major jewellery retailer once operating over 4,000 stores across India. He took over the family-run business from his father in 1985 and expanded it aggressively. A long-time player in the gem and jewellery trade, Choksi is also the maternal uncle of Nirav Modi, another key accused in the PNB scam
What is the PNB Scam?
The PNB scam came to light in early 2018 when the public sector bank reported fraudulent issuance of Letters of Undertaking (LoUs) worth over ₹13,000 crore from its Brady House branch in Mumbai. These LoUs were used to secure overseas credit for Choksi and Modi’s companies – Gitanjali Gems, Diamond R US, Solar Exports, and Stellar Diamonds – which were later found to be shell firms. The LoUs were issued in violation of Reserve Bank Of India (RBI) guidelines, with complicit PNB officials allegedly bypassing internal systems.
Investigations revealed that the scam was perpetrated over several years, from 2014 to 2017. In March 2018, a special PMLA court issued non-bailable warrants against Choksi and others.
What was Choksi’s alleged role in the scam?
Nirav Modi, his wife Ami, brother Nishal, and Choksi were all named in the charge sheet filed by the Central Bureau of Investigation (CBI).
Choksi is accused of criminal conspiracy, cheating, corruption, money laundering and breach of trust. His firm allegedly caused a wrongful loss of ₹6,097.63 crore to PNB. He also defaulted on loans from other banks, including a $25.8 million default by a firm linked to his brother Chetan Choksi in Belgium.
The Enforcement Directorate (ED) raided over 136 locations and seizing assets worth more than ₹2,500 crore. This includes jewellery, immovable properties, vehicles, and shares in both Indian and overseas entities linked to Choksi and his Gitanjali Group.
Three prosecution complaints have been filed by the ED, and Indian authorities have continued to push for his extradition ever since he fled the country.
How did Choksi evade arrest?
Choksi’s escape story has seen multiple twists. Choksi became an Antiguan citizen in late 2017, months before the fraud surfaced, and fled India in January 2018, days before authorities began investigating the scam.
In 2021, he mysteriously disappeared from Antigua and Barbuda and resurfaced in Dominica, reportedly while trying to flee to Cuba by boat. However, Dominican courts blocked his repatriation. In 2023, Interpol controversially revoked the Red Notice against him, complicating extradition efforts.
Reports in 2024 suggested Choksi had relocated from Antigua to Belgium, where both his wife and extended family have roots. His daughter is also married to a diamond merchant based in Antwerp.
Following his arrest in Belgium, authorities may finally have an opening to bring Choksi back to India to face justice.
Medical treatment and extradition
A report by news agency ANI suggests that Choksi’s legal team is expected to challenge the extradition on health and humanitarian grounds.
Choksi’s nephew, Nirav Modi, remains in custody in the United Kingdom since his arrest in 2019. Despite exhausting all legal avenues, his extradition has yet to materialise.
