Mehul Choksi Arrested In Belgium

Mehul Choksi, a key accused in the Rs 13,500 crore Punjab National Bank loan fraud case, was arrested in Belgium. New Delhi has pressed for his extradition from Belgium, so that the 65-year-old fugitive diamantaire can be tried in India. Choksi is said to have arrived in Belgium last year to get cancer treatment. Prior to that, he had been living in Antigua and Barbuda as a citizen since 2018. Choksi’s wife, Preeti, is said to be a Belgian citizen.

Mehul Choksi Arrested In Belgium

Why In India

• Mehul Choksi, a key accused in the Rs 13,500 crore Punjab National Bank loan fraud case, was arrested in Belgium. New Delhi has pressed for his extradition from Belgium, so that the 65-year-old fugitive diamantaire can be tried in India. Choksi is said to have arrived in Belgium last year to get cancer treatment. Prior to that, he had been living in Antigua and Barbuda as a citizen since 2018. Choksi’s wife, Preeti, is said to be a Belgian citizen.

What Is Mehul Choksi Accused Of

• Coming from a family of diamantaires, Choksi expanded his family business by opening fancy stores across India and abroad under the aegis of Gitanjali Group.
• Along with his nephew Nirav Modi, he splurged heavily on marketing and advertising — roping in international stars such as Kate Winslet and Rosie Huntington-Whiteley.

• Much of this, however, was funded by loans from the PNB. According to CBI and ED, between 2014 and 2017, instead of repaying their loans, the two diamantaires fraudulently got Letters of Understanding (LoUs) issued from the Brady House branch of the PNB in Mumbai in connivance with certain bank officials. These LoUs were used to avail credit on foreign shores to fund their business and build personal assets.

• While the LoUs were supposed to be repaid within three months, they were merely renewed with interest by bank officials. This kept a continuous flow of liquidity for the two jewellers even as the debt kept piling up.
• By the time the PNB discovered the irregularities and approached the CBI, both Choksi and Modi had fled the country, after setting the bank back by over Rs 13,500 crore.
• Choksi alone stands accused of defrauding the bank of more than Rs 6,000 crore. Following the registration of the case, ED attached Choksi’s assets, including the diamonds in his stores, claiming them to be of value in excess of Rs 5,000 crore. However, a laboratory examination of the diamonds revealed most of them were fake.

• The real value of Choksi’s assets, including all his properties and investments, today stands at around Rs 2,500 crore. CBI had first named Choksi and his firms, including Gitanjali Gems, in 2018, based on a complaint received by Punjab National Bank (PNB) for alleged issuance of fraudulent Letters of Undertaking in their favour causing losses to the bank.
• The ED subsequently filed a complaint alleging that Choksi and others were involved in money-laundering the proceeds of crime in overseas accounts. Choksi has been booked under the Prevention of Money Laundering Act and other sections pertaining to cheating, criminal conspiracy of the Indian Penal Code and relevant sections of the Prevention of Corruption Act.

• The ED filed a plea in 2018 under the Fugitive Economic Offenders Act against Choksi, which is yet to be decided. If Choksi is declared a fugitive economic offender and does not return to India, his properties can be confiscated even before the trial against him begins.
• Choksi took the citizenship of Antigua and Barbuda in November 2017, through an investment for citizenship programme. The ED claims he left India on January 2, 2018, days before an FIR was filed in the PNB case.

What Has Happened Since The Fir

• According to the Ministry of External Affairs, India does not have an Extradition Treaty with Antigua & Barbuda, but an “extradition arrangement is in place since 2001.” While the legal process for extradition was going on, in 2021, India was accused of plotting a secret operation to get Choksi back to the country.

• In May of that year, Choksi was apprehended in Dominica for illegal entry. His family and lawyers alleged thr jeweller had been “kidnapped by Indian agents” on May 23 by trapping him through a Hungarian woman. He was then allegedly ferried to Dominica in a yacht by two Indians.
• India appealed to Dominica for extradition, but Choksi was sent back to Antigua and Barbuda.

How Did Mehul Choksi End Up In Belgium

• Choksi is in Antwerp allegedly for cancer treatment. His wife, Preeti Choksi, is a Belgian citizen, and Mehul has reportedly obtained an ‘F Card’ to stay in the country, which is issued to family members of European Union citizens.
• While India does have an extradition treaty with Belgium, the legal process could be long. Choksi’s team is likely to use his health condition to argue against deportation to India.

What Are Some Hurdles That India Could Face

• Choksi’s lawyers will most certainly bring up a botched attempt to bring him to India from Dominica in 2021. In the last week of May 2021, Choksi, who had been living in Antigua since 2018, suddenly appeared in Dominica.

• Local media splashed photos of the jeweller sitting in a wheelchair with a black eye and bruised face. Dominican authorities had put him under arrest for illegally entering the country. Meanwhile, a private jet from India carrying CBI and Ministry of External Affairs officials landed in Roseau to bring him back.
• Choksi’s family and lawyers alleged that Indian agents had assaulted and kidnapped the jeweller after trapping him with the help of a Hungarian woman identified as Babara Jarabic. He was then bundled off in a yacht and taken to Dominica by two Indians — identified as Gurmit Singh and Gurjeet Bhandal. In press conferences, Chokso’s family and lawyers produced documentary evidence and photographs showing the trio’s involvement.

• His lawyers alleged Choksi was threatened and told to sign a consent form saying that he is going to India of his own will. This was done, according to his London lawyer Michael Polak, to deprive Choksi of the protection of law that he enjoys as a citizen of Antigua. Note that India does not have an extradition treaty with Antigua.
• Following these revelations, Dominica withdrew its case against Choksi and sent him back to Antigua. The Interpol withdrew its Red Corner Notice against Choksi in 2023 on the grounds that he was “abducted” for “deportation” to India, and there was a “risk” that he would not get a fair trial in the country.

• His lawyers will likely use this incident to suggest that Choksi will not receive due process in India. They are likely to also raise allegations of human rights violations and poor prison conditions in the country, as well as Choksi’s ill health to oppose extradition. Finally, Choksi being an Antiguan citizen could significantly complicate the legal process to bring him to India from Belgium.