Indian authorities move closer to bringing back a key suspect in one of the country’s biggest financial frauds.
Arrest in Belgium Following Extradition Request
Mehul Choksi, a fugitive Indian billionaire jeweler, has been arrested in Belgium at the request of Indian authorities. The arrest took place on Saturday, as confirmed by his lawyer Vijay Aggarwal, who spoke with the BBC on Monday. This marks a significant development in India’s efforts to extradite Choksi, who has been on the run since 2018 following his alleged involvement in a $1.8 billion fraud case.
The PNB Scam: One of India’s Largest Banking Frauds
Choksi is a central figure in the Punjab National Bank (PNB) fraud case, in which he and his nephew, Nirav Modi, allegedly orchestrated a massive scam involving fraudulent credit guarantees. According to Indian authorities, the duo, in collusion with bank officials, manipulated the banking system to obtain unauthorized letters of undertaking (LoUs), which allowed them to secure overseas credit from other banks.
These fraudulent financial instruments enabled the businessmen to siphon off an estimated $1.8 billion. Investigations by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) allege that the funds were later laundered through a network of shell companies.
Choksi’s Legal Defense: Illness and Political Motivation
Choksi has consistently denied the allegations. Following his arrest in Belgium, his legal team announced that they would challenge both his detention and the extradition process.
“We will argue that Mr. Choksi is not a flight risk and is undergoing cancer treatment, making his detention unnecessary,” said Vijay Aggarwal, his legal counsel. “Additionally, we will contest the extradition on the basis that the evidence against him is insufficient and that the entire process is politically motivated. We fear he will not receive a fair trial in India.”
India Yet to Respond Officially
While the BBC has reached out to the Indian Ministry of External Affairs and the Enforcement Directorate for comments, there has been no official response at the time of reporting. However, sources indicate that Choksi’s arrest was linked to non-bailable warrants issued by Indian courts in 2018 and 2021.
The timing of the arrest has raised questions, as Indian authorities have been pursuing his extradition for several years with limited success.
A Web of International Movement and Citizenship
Mehul Choksi fled India in early 2018, around the time the PNB scam came to light. He initially traveled to the United States and then moved to Antigua and Barbuda, where he acquired citizenship through the country’s Citizenship by Investment Program.
In 2021, he made headlines again when he was allegedly kidnapped from Antigua and taken to Dominica under mysterious circumstances. He was arrested there but was eventually allowed to return to Antigua.
Nirav Modi: The Other Key Accused
Choksi’s nephew, Nirav Modi, also fled India in 2018 and has been residing in the United Kingdom. He is currently lodged in a London prison, fighting his own extradition case. Like his uncle, Modi has denied any wrongdoing.
Once celebrated as a rising star in the global luxury jewelry market, Nirav Modi’s designs were worn by Hollywood A-listers including Naomi Watts and Kate Winslet. His brand even had Bollywood star Priyanka Chopra as an ambassador.
Rise and Fall of a Diamond Empire
Before the scandal, Mehul Choksi was the head of Gitanjali Gems, one of India’s largest jewellery retail chains, with a presence in over 4,000 locations across the country. Along with his nephew, he had built an empire that appeared to reflect India’s booming luxury and retail sectors.
Their reputations, however, took a massive hit following the fraud allegations. The scandal also exposed significant vulnerabilities in India’s banking infrastructure, particularly in the use of LoUs and internal oversight at public sector banks.
Whistleblower Speaks Out
Hariprasad SV, a Bengaluru-based entrepreneur who had alerted authorities in 2016 about suspicious activities involving PNB, welcomed Choksi’s arrest.
“This is great news for India,” he told the ANI news agency. “But it’s not just about bringing him back. The real goal should be to recover the billions he allegedly looted from the country.”
What Lies Ahead
With his arrest, legal proceedings in Belgium will determine whether Mehul Choksi is extradited to India to face trial. His legal team is expected to mount a strong defense, but Indian investigators are hopeful that justice will finally be served in a case that has drawn international scrutiny and remains one of the most significant financial scandals in India’s history.
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