Mehul Choksi, an absconding diamond jeweller who was involved in alleged Rs 13,000 crore PNB bank loan fraud case, has been detained in Belgium following an extradition request by Indian probe agencies.
Choksi, the second prime accused in the Punjab National Bank (PNB) fraud case after his nephew Nirav Modi, has been detained in Belgium. The action was taken on Saturday based on an extradition request by India’s Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
Choksi had been residing in Antigua since 2018 after fleeing India, and he traveled to Belgium last year citing medical treatment. Indian authorities had been pursuing his extradition after an earlier Interpol Red Notice against him was withdrawn.
According to sources, Indian agencies shared at least two open-ended arrest warrants—issued by a special court in Mumbai in 2018 and 2021—with Belgian authorities as part of the extradition process. Formal paperwork is currently underway, and officials expect Choksi may apply for bail on medical grounds.
Choksi, Nirav Modi, their relatives, employees, and certain bank officials were booked in 2018 by the CBI and ED for their alleged involvement in a multi-crore loan fraud at PNB’s Brady House branch in Mumbai. Investigations revealed that Choksi, his firm Gitanjali Gems, and others conspired with bank officials to fraudulently obtain Letters of Undertaking (LoUs) and enhance Foreign Letters of Credit (FLCs) without proper procedures, resulting in a significant financial loss to the bank.
The CBI has filed at least two chargesheets against Choksi, while the ED has filed three prosecution complaints in connection with the case.
Meanwhile, Nirav Modi, who has been declared a fugitive economic offender, has been lodged in a London jail since 2019. He was arrested based on India’s legal request and continues to contest his extradition.
According to the agencies, PNB officials issued 165 LoUs and 58 FLCs between March and April 2017, enabling 311 bills to be discounted. These were allegedly issued to Choksi’s companies without sanctioned limits or required cash margins and were not recorded in the bank’s central system—making them difficult to detect.
LoUs function as guarantees by Indian banks to foreign lenders. If the borrower defaults, the Indian bank assumes the liability. Based on PNB’s LoUs, several overseas banks—including SBI (Mauritius and Frankfurt), Allahabad Bank (Hong Kong), Axis Bank (Hong Kong), Bank of India (Antwerp), and Canara Bank (Manama)—extended loans.
When Choksi’s firms failed to repay, PNB had to settle dues amounting to ₹6,344.97 crore (approximately $965.18 million), including overdue interest.
As part of its investigation, the ED has attached or seized assets worth ₹2,565.90 crore belonging to Choksi. The court has approved the monetization of these assets.
