The Belgian police have reportedly arrested fugitive diamond merchant Mehul Choksi on Saturday on the request of Central Bureau of Investigation. Choksi is one of the two prime accused in the $2-billion Punjab National Bank (PNB) fraud.
The action against the second "prime suspect" in this case, after Choksi's nephew diamantaire Nirav Modi, was taken on Saturday based on an extradition request moved by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
The Belgian government had confirmed Choksi's presence in the European nation in March 2025 while asserting that they are giving the matter "great importance and attention", as per media reports.
Choksi was located in Belgium last year when he went there on the grounds of getting medical treatment. He had been staying in Antigua since 2018 after leaving India.
On March 23, reports said that the businessman was seen in Belgium and is said to be living there with his wife, Preeti Choksi, after securing a residency card.
PTI report said the Interpol Red Notice against him for arrest was "deleted" sometime back and the Indian agencies were pursuing him via the extradition route since then.
At least two open-ended arrest warrants, issued by a special court in Mumbai in 2018 and 2021, have been shared by the Indian agencies with their Belgian counterparts as part of the extradition request, the sources said.
Formal paperwork is being done following the arrest/detention as Choksi may seek bail on health grounds, they said.
Charges Against Choksi
Choksi, Modi, their family members and employees, bank officials and others were booked by the CBI and the ED in 2018 for perpetrating the alleged loan fraud at the Brady House branch of the Punjab National Bank (PNB) in Mumbai.
It was alleged that Choksi, his firm Gitanjali Gems and others "committed the offence of cheating against PNB in connivance with certain bank officials by fraudulently getting the LOUs (letters of undertaking) issued and got the FLCs (foreign letter of credit) enhanced without following prescribed procedure and caused a wrongful loss to the bank".
The CBI has filed at least two chargesheets against him in this case while the ED has filed three such prosecution complaints.
Modi, declared a fugitive economic offender, has been lodged in a London jail since he was held by the authorities there in 2019 on the basis of a legal request made by the ED and the CBI in this case. He is contesting extradition to India.
According to the investigating agencies, officials at PNB's Brady House branch in Mumbai issued 165 LoUs and 58 FLCs during March-April 2017, against which 311 bills were discounted.
These LoUs and FLCs were allegedly issued to Choksi's firms without any sanctioned limit or cash margin and without making entries in PNB's central banking system to evade any scrutiny in case of a default.
LoUs are a guarantee given by a bank on behalf of its client to a foreign bank. If the client does not repay the foreign bank, the liability falls on the guarantor bank.
Based on these LoUs by PNB, money was lent by SBI, Mauritius; Allahabad Bank, Hong Kong; Axis Bank, Hong Kong; Bank of India, Antwerp; Canara Bank, Manama; and State Bank of India, Frankfurt.
"Since the accused companies did not repay the amount availed against the said fraudulent LoUs and FLCs, PNB made the payment of Rs 6,344.97 crore (USD 965.18 million), including the overdue interest, to the overseas banks, which had advanced buyer's credit and discounted the bills against the fraudulent LoUs and FLCs issued by the PNB," the CBI's supplementary charge sheet in the PNB bank fraud case alleged.
The ED has attached or seized assets worth Rs 2,565.90 crore in the case against Choksi and the court has allowed "monetisation" of all these properties.
India Seeks Choksi's Extradition
As reported by the Associated Times, a Caribbean-focused outlet, Indian authorities have called on Belgian authorities to initiate Choksi's extradition to India. The same is yet to be confirmed by the Ministry of External Affairs.
As per the Associated Times, Choksi secured an "F Residency Card" in Belgium in November 2023. The report further adds that Choksi's allegedly fabricated his documents to Belgian authorities to misrepresent his nationality during the application process.
