Fugitive businessman Mehul Choksi, who defrauded Punjab National Bank of over Rs 13,000 crores, was arrested in Belgium on Saturday. After his arrest by Belgian authorities, Choksi is now expected to be extradited to India for the trial in the fraud case.
Choksi was reportedly living in Antwerp with his wife after she was granted an F residency card in November 2023. Authorities tracked Choksi down and arrested him from a hospital on April 12, where he was undergoing treatment.
In 2018, Choksi, his nephew Nirav Modi and other accomplices were accused of defrauding Punjab National Bank, India's second-largest state-run lender, of Rs 13,500 crore.
PNB Bank Fraud Scam | Case Explained
What Is The Case?
The PNB fraud scam was exposed in 2018 after Punjab National Bank filed its first fraud report with the Reserve Bank of India and filed a criminal complaint with the Central Bureau of Investigation.
As per reports, Nirav Modi and Mehul Choksi manipulated PNB's system to obtain fraudulent Letters of Undertaking (LoUs) in collusion with bank staff at the Brady House branch on Fort, Mumbai.
As per the chargesheet, two employees from PNB issued LoUs to overseas branches of Indian Banks using the international financial system (SWIFT) to secure loans for the import of pearls.
RBI's guidelines for the 90-day period from the date of shipment was ignored by overseas branches of Indian banks, and no entries ere made in PNB's central banking system.
As per reports, Modi's first fraudulent LoU dates back to March 10, 2011. And for the next six years, Nirav Modi was able to execute 1,212 more such guarantees.
The fraud went undetected for years due to the complicity of the bank staff, including former Deputy General Manager Gokulnath Shetty.
Choksi and Modi acquired guarantees worth ₹11,400 crore to obtain loans from the overseas branches of Indian banks, claiming to need the cash to import pearls. However, this cash was then diverted and laundered.
How Did It Unfold?
The scam fell apart from a new employee at the bank noticed the transactions. Due to the use of of the SWIFT network, PNB's management was kept in the dark for years due to no record of these overseas transactions.
PNB alleged that associates of three firms - Diamond R US, M/s Solar Exports and M/s Stellar Diamonds- approached the bank with a request for LoUs for its overseas suppliers.
Upon their request, PNB demanded a 100 percent margin for issuing a letter, but the firms said they received LoUS in the past, which did not require such guarantees.
After this revelation, the bank suspected a fraud case and dug into the transaction history.
In January 2018, the bank filed a complaint with the CBI against irav Modi, Ami Modi, Nishal Modi and Mehul Choksi, along with two PNB employees, for cheating and causing wrongful loss.
By May 2018, the scam increased to over Rs 14,000 crore.
Nirav Modi, Choksi Flee India
Days before the scam broke out, Nirav Modi fled India and went to the US, allegedly on a fake passport.
In Manhattan, New York, he filed for bankruptcy protection. Modi then moved to London, where he was arrested by UK authorities in March 2019.
Following his arrest, Swiss authorities froze a total of $6 million in Modi라이브 바카라 Swiss bank accounts. Furthermore, Nirav Modi has also been accused of defrauding Los Angeles entrepreneur Paul Alfonso and has been sued by the state of California.
Choksi was declared a fugitive in January 2018. Citing medical reasons, Choksi fled for the US and later settled in Antigua.
In 2017, Mehul Choksi obtained citizenship in Antigua. As per reports, Choksi attempted to flee to Cuba in 2021 but was detained in Dominica and was then deported to Antigua.
After Antigua, Choksi and his wife were spotted in Belgium for medical treatment, leading to the arrest of the fugitive businessman.
