Who is Mehul Choksi, Why Was He Arrested in Belgium, and How Did the Rs 13,850 Crore PNB Scam Unfold?

Mehul Choksi, a fugitive Indian businessman and former chairman of the Gitanjali Group, is detained in Belgium by local law enforcement authorities following a request from India’s Central Bureau of Investigation (CBI).

According to ANI, he was apprehended on a Saturday after his presence in the country was confirmed. His arrest marks a significant step in India’s long-standing efforts to bring him to justice in connection with the multi-crore Punjab National Bank (PNB) fraud case.

Mehul Choksi is a fugitive Indian businessman and former chairman of the Gitanjali Group, a once-prominent jewelry company. Born in 1959, Choksi was a well-known figure in India’s diamond industry. His reputation, however, was severely tarnished after he was named as a key accused in the Punjab National Bank (PNB) fraud case, one of the largest financial scams in Indian banking history.

In January 2018, just before the scam was publicly revealed, Choksi fled India, first travelling to the United States and then settling in Antigua and Barbuda after acquiring citizenship there in 2017.

Also Read: Fugitive Businessman Mehul Choksi Arrested in Belgium After India’s Extradition Request

The PNB scam unfolded between 2014 and 2017, during which Choksi, along with his nephew Nirav Modi and several bank officials, allegedly fraudulently obtained Letters of Undertaking (LoUs) and Foreign Letters of Credit without proper collateral or documentation.

The scam was unearthed in early 2018, prompting the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) to launch a massive investigation. Nirav Modi was arrested in London in May 2019 and remains in custody, while Choksi has been on the run since leaving India.

The Rs 13,850 crore Punjab National Bank (PNB) scam was one of the biggest banking frauds in India, involving fugitive businessmen Mehul Choksi and his nephew Nirav Modi. The scam worked through the misuse of Letters of Undertaking (LoUs), which are guarantees issued by a bank to help a customer get credit from overseas banks.

From around 2011 to 2018, Choksi, Modi, and their companies obtained these LoUs from PNB’s Mumbai branch without following proper banking procedures. Some bank officials helped them bypass the system, so the loans didn’t show up in PNB’s core records.

They used the funds for their businesses and kept rolling over old loans by getting fresh LoUs.

Over the years, the scam grew bigger, and when it was finally uncovered, the total fraud added up to Rs 13,850 crore. Of this, about Rs 6,498 crore was linked to Nirav Modi’s companies and around Rs 6,097 crore to Choksi’s Gitanjali Group, with the rest being interest and charges.

Following the exposure of the scam, Indian authorities took extensive measures to recover the defrauded money. The ED conducted searches at over 136 locations across India and seized valuables worth Rs 597.75 crore linked to Choksi’s Gitanjali Group. In total, movable and immovable assets worth Rs 2,565.90 crore were attached, including properties in India and abroad, luxury vehicles, bank accounts, a factory, and shares in listed companies. Three prosecution complaints have been filed against Choksi, and the case remains under active investigation.

In 2024, Choksi relocated to Belgium from Antigua, citing medical treatment for blood cancer. Along with his wife Preeti, who is a Belgian citizen, he obtained an F Residency Card and settled in Antwerp. On a recent Saturday, Belgian authorities arrested Choksi at the request of the CBI after confirming his presence in the country. Preparations for his extradition to India are underway. 

However, Choksi is preparing a legal defence and plans to apply for bail while opposing the extradition on medical and legal grounds.

Choksi’s legal team argues that his health condition and citizenship status in Antigua should protect him from extradition. The situation is further complicated by the revocation of Interpol’s Red Corner Notice against him in March 2023. While Indian authorities see his arrest in Belgium as a breakthrough, the legal battle ahead may be long and complex. Meanwhile, his nephew Nirav Modi remains jailed in the UK, awaiting extradition to India.