​Mehul Choksi Apprehended in Belgium: A Turning Point in India’s Largest Banking Fraud Case

In a significant development, fugitive diamond merchant Mehul Choksi has been arrested in Antwerp, Belgium, marking a pivotal moment in the ongoing investigation of the ₹13,850 crore Punjab National Bank (PNB) fraud case. This arrest follows a concerted effort by Indian authorities, including the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED), to bring Choksi to justice for his alleged role in one of India's most substantial banking scams.​

Mehul Choksi

The PNB Fraud Unveiled

Between 2011 and 2018, Mehul Choksi, along with his nephew Nirav Modi, allegedly orchestrated a massive fraud involving the unauthorized issuance of Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs) by PNB's Brady House branch in Mumbai. These financial instruments were used to secure overseas credit, which was subsequently misappropriated. Choksi's firms, including Gitanjali Gems, Gili India, and Nakshatra Brands, are accused of siphoning off over ₹6,344.96 crore through these fraudulent means .

Investigations revealed that bank officials, in collusion with Choksi, bypassed the bank's core banking system to issue these LoUs and FLCs, thereby avoiding detection. The funds obtained were not used for legitimate business purposes but were diverted for personal gains and to repay earlier credits, creating a cycle of debt and deception .

Flight and International Pursuit

In January 2018, just before the scam came to light, Choksi fled India and acquired citizenship in Antigua and Barbuda. Despite extradition efforts, he remained elusive, citing health issues and alleging political persecution. His recent move to Belgium, a global diamond trading hub, reignited extradition proceedings, leading to his arrest in Antwerp .​

Legal and Financial Repercussions

The ED has been actively pursuing the recovery of assets linked to the fraud. In December 2024, a Special PMLA Court in Mumbai authorized the auction of properties worth ₹2,565.90 crore associated with Choksi. These assets include luxury flats and industrial properties, with proceeds aimed at compensating the victims and financial institutions affected by the scam .

Additionally, Choksi's wife, Priti Choksi, has come under scrutiny for her alleged involvement in laundering the defrauded funds through offshore companies and real estate investments in Dubai. Properties linked to these activities have been seized by Indian authorities as part of the ongoing investigation.​

The Road Ahead

Choksi's arrest in Belgium represents a critical juncture in India's efforts to address high-profile financial frauds. The extradition process will now proceed through diplomatic and legal channels, with Indian authorities aiming to bring Choksi back to face trial. This case underscores the importance of international cooperation in tackling financial crimes and the ongoing commitment of Indian agencies to uphold the integrity of the financial system.​

As the legal proceedings unfold, the focus remains on ensuring accountability, recovering misappropriated funds, and reinforcing measures to prevent such large-scale frauds in the future.