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Mehul Chinubhai Choksi (born 5 May 1959) is an Indian-born fugitive[1] and businessman living in Antigua and Barbuda,[2] who is wanted by the Indian judicial authorities for alleged criminal conspiracy, criminal breach of trust, cheating and dishonesty including delivery of property, corruption and money laundering.[3]

Key Information

Mehul Choksi along with his nephew Nirav Modi, his wife Ami Modi, and brother Neeshal Modi are named in an alleged Rs 12,636 crore fraud at Punjab National Bank.[4] In order to escape India after the scam, he secured the citizenship in Antigua and Barbuda, a Caribbean Island through their Citizenship by Investment Program in 2017.[5]

He was the owner of Gitanjali Group, a retail jewellery company with 4,000 stores in India.[6]

An arrest warrant for Choksi has been issued in connection with the alleged Punjab National Bank fraud case.[7] He was formerly the subject of an Interpol red notice, but this was withdrawn in 2023.[8] He was allegedly involved in stock market manipulation in 2013.[9] In late May 2021, he went missing from Antigua and Barbuda. Choksi claims that he was kidnapped from Antigua by agents of the Indian state,[10] while several reports and investigation revealed that he fled the country to escape legal proceedings in India.[11] After being found and arrested in Dominica on charges of illegal entry he was then returned to Antigua and Barbuda on interim bail for medical treatment. Investigations into his disappearance are ongoing.[12]

According to NDTV,[13] Mehul Choksi tried hard to spread his kidnapping narrative and evade extradition to India. In this attempt, he also allegedly brought a string of officials in Antigua to extend the court proceedings in his disappearance case in the country.[14]

Again according to NDTV,[13] evidence has also been uncovered that with others to influence Interpol and interfere into its proceedings to delay his extradition to India.[15] Belgian authorities confirmed on April 14, 2025 that they have Mehul Choksi in custody after he was arrested near his current residence in Antwerp.[16]

Early life

[edit]

Mehul Choksi was born on 5 May 1959 in Bombay,[17] the son of Chinubhai Choksi.[18] He was educated at G. D. Modi College in Palanpur, Gujarat.[18] He has three children, a son and two daughters.[17] Choksi is the maternal uncle of fugitive businessman Nirav Modi.[19][20]

His younger brother Chetan Chinubhai Choksi owned and operated a diamond company named Diminco NV, based in Antwerp, which had defaulted on a US$25.8 million payment to a subsidiary of ICICI Bank.[21] In 2013, the bank litigated a lawsuit against Diminco NV, in commercial courts in Belgium and UK.[22]

Career

[edit]

Choksi started his career in the gem and jewellery sector in 1975, and took over the leadership of Gitanjali Gems from his father in 1985, when it was focused on just rough and polished diamonds.[18] He owns Gitanjali Group, which includes Gitanjali Gems.[23]

Punjab National Bank (PNB) fraud case

[edit]

In March 2018, a special PMLA court issued non-bailable arrest warrants (NBWs) against Choksi, and his nephews Nirav Modi and Neeshal Deepak Modi, owner of Firestar Diamonds.[24] They are suspected of colluding with two employees of Punjab National Bank (PNB), the country's second-largest state-owned lender, in an alleged $1.8 billion fraud.[23] At least six PNB staff and at least six employees of Choksi and Modi have been arrested so far.[23] Choksi is a fugitive of Indian government. Choksi has protested his innocence in an open letter.[23] On 6 March 2018, the CBI detained Vipul Chitalia, the Vice-President of Gitanjali Group of Companies and a key aide of Choksi. Chitalia was arrested at Mumbai airport and remained in custody till March 2018.[25] A designated PMLA authority held that 41 properties worth about Rs 1,210 crore, attached by the Enforcement Directorate (ED) in the name of Mehul Choksi and his associated firms, are money laundering assets and ordered that their attachment should continue. The central probe agency provisionally attached 15 flats and 17 office premises in Mumbai, a mall in Kolkata, a four-acre farm house in Alibaug and 231 acres of land at locations like Nashik, Nagpur, Panvel in Maharashtra and Villupuram in Tamil Nadu, in February 2018 under the Prevention of Money Laundering Act (PMLA) in connection with the about US$2 billion alleged fraud at a Mumbai-based branch of the Punjab National Bank (PNB).[26]

On 7 January 2018, Choksi left India to the Caribbean nation of Antigua and Barbuda. A few days later, the PNB scam was disclosed. On 15 January, he took the oath of citizenship of Antigua and Barbuda, where he applied for the citizenship in November 2017 under the country's Citizenship by Investment program.[27] However, Indian authorities argue that he has not renounced his Indian citizenship.[28][29][30] On 17 June, his lawyer informed the Bombay High Court that he left India for medical check-up and not to avoid prosecution in the case.[31] Ever since, CBI has been trying to extradite him back to India.[32] In December 2018, Interpol published a Red Notice against Choksi at India's request.[33]

In May 2021, Choksi was detained in Dominica, with his lawyers alleging that he had been kidnapped from Antigua and forcibly taken there by individuals acting on behalf of Indian agents. He subsequently lodged a lawsuit in London’s High Court, accusing the Indian government of organizing the abduction and coercing a false confession, claims that India has denied.[34] In 2023 the Red notice issued in 2018 was withdrawn.[35][36]

In April 2025, Choksi was arrested in Antwerp by Belgian police after India requested his extradition. His lawyers argued that he should not be kept in custody because of serious health problems, including cancer. Soon after, India’s Central Bureau of Investigation (CBI) sent a team to Belgium to help prosecutors by providing documents and working with a European law firm.[36] Choksi asked for bail twice, but both requests were denied—the first by the Court of Cassation in the summer and the second on August 22 by the court of appeal, which refused his offer of house arrest, saying he was a flight risk with a record of avoiding justice. His extradition hearing is set for mid-September 2025, a key moment in the case.[37]

See also

[edit]

References

[edit]
Revisions and contributorsEdit on WikipediaRead on Wikipedia

Mehul Choksi

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from Grokipedia
Mehul Choksi is an Indian businessman and accused of orchestrating a massive banking at (PNB), involving the issuance of fraudulent letters of undertaking (LoUs) that enabled his companies to siphon off approximately ₹14,000 crore without proper authorization or collateral. As promoter of the , a jewelry and diamonds conglomerate, Choksi allegedly colluded with bank officials and his nephew to bypass SWIFT messaging protocols and secure unauthorized credit from overseas branches of Indian banks, inflating imports of gems and bullion while diverting funds. The scam, uncovered in early 2018, triggered the collapse of Gitanjali Gems, which faced proceedings and asset auctions amid charges of , cheating, and . Prior to the scandal, Choksi built into a prominent player in 's organized jewelry retail, with outlets under brands like Gili and Candere, though investigations revealed discrepancies in inventory and financial reporting that predated the PNB exposure. After fleeing in January 2018—just ahead of the fraud's public revelation—he acquired in via its investment program in 2017, claiming to renounce Indian nationality the following year, though Indian authorities contest this and maintain he remains subject to their . Relocating to in 2023 on a residency permit linked to his wife's , Choksi faced there on April 11, 2025, following 's extradition request; a Belgian appeals rejected his challenges on October 17, 2025, paving the way for his return to face trial on charges carrying potential . The case underscores systemic vulnerabilities in India's banking, including lax internal controls and risks, with probes revealing over ₹6,300 routed through Choksi's firms alone via fake LoUs. Additional allegations include of Antiguan officials to evade and fabrication of an abduction narrative in 2021 to resist return, further complicating his legal entanglements across jurisdictions. As of October 2025, formalities continue, with Choksi detained pending final approval, marking a potential end to his seven-year evasion.

Early Life and Background

Family Origins and Upbringing

Mehul Choksi was born on May 5, 1959, in , , into a Gujarati trading family with roots in , —a town historically associated with 's diamond merchant community. His father, Chinubhai Choksi, was a diamond trader who established the family's business in the gems and jewelry sector during the , fostering an environment steeped in commerce from an early age. As the youngest of six children—comprising four sisters and one brother, Chetan Chinubhai Choksi—Choksi grew up in relative affluence within a household centered on the diamond trade, which shaped his early exposure to business practices. The family's well-established position in this niche industry, originating from Palanpur's network of diamantaires, provided a direct pathway into the sector without formal apprenticeships outside familial ties. Choksi's upbringing emphasized practical immersion over unrelated pursuits; by 1975, at age 16, he joined his father's operations, marking the transition from familial oversight to active participation in diamond trading. This early involvement, grounded in the intergenerational Gujarati tradition, laid the groundwork for his subsequent ventures, though details on his pre-business schooling remain limited beyond regional influences.

Education and Initial Influences

Mehul Choksi pursued his undergraduate studies in commerce at G.D. Modi College in Palanpur, Gujarat, graduating from the institution before entering the family business. This formal education provided foundational knowledge in business principles, though conflicting reports suggest he may have briefly attended the University of Mumbai without completing a degree. Choksi's initial influences stemmed primarily from his family's longstanding involvement in the diamond trade, originating from the Jain merchant community known for its expertise in gemstones. Born on May 5, 1959, into a household of diamond merchants, he received an informal apprenticeship through early exposure to trading operations, which shaped his entrepreneurial outlook and directed him toward the jewelry sector rather than unrelated pursuits. This familial immersion, rather than academic or external mentors, proved instrumental in his transition to professional roles in the mid-1970s.

Business Career

Entry into Diamond Trade

Mehul Choksi entered the trade in 1975 upon graduating with a commerce degree from G.D. Modi College in , , by joining his father Chinubhai Choksi's trading business in . The family enterprise, rooted in the Gujarati , focused on trading rough and polished diamonds, providing Choksi with hands-on in sourcing, cutting, and polishing operations typical of Mumbai's bustling diamond bourse. This entry leveraged familial networks in an industry dominated by kinship ties and informal training, where Palanpur-origin traders like the Choksis had established footholds since the mid-20th century amid India's post-independence export growth in gems. Choksi's initial role involved practical immersion in the , from recovering diamond fragments during —a common low-level task—to understanding market dynamics in and hubs, building on his father's three-decade experience in merchant-to-manufacturer transitions. By the early , he had assumed greater responsibilities, contributing to the business's expansion amid India's policies that boosted diamond exports from $100 million in 1975 to over $1 billion by 1985. This phase marked his foundational expertise in an opaque sector reliant on credit lines and relational trust, setting the stage for later formalization without evidence of independent ventures prior to family integration.

Founding and Growth of Gitanjali Group

Mehul Choksi joined his family's diamond trading business, originally established in the 1960s, in 1978 and assumed leadership around 1981. On August 21, 1986, he incorporated as a , rebranding and formalizing the core operations of what became the , focused initially on , , and jewelry . Under Choksi's direction, the group expanded from trading into integrated manufacturing and exporting of rough and polished diamonds and finished jewelry, positioning itself as one of India's top exporters by the early . The company went public in , listing on the and National Stock Exchange, which facilitated further capital raising. In 1994, Gitanjali launched its first organized retail brand, Gili, targeting lightweight diamond jewelry, marking a shift toward consumer-facing operations amid India's . Post-1991 reforms enabled retail expansion, with the group acquiring , forming joint ventures, and issuing $110 million in foreign bonds to fund store networks across and select international markets. By 2009, operated dozens of and aimed for $5 billion in annual revenues, with its stock peaking above Rs 600 per share in amid rapid growth in organized jewelry retail. The group developed capabilities in and segments, though and exports remained core until financial strains emerged later.

Expansion into Retail and International Markets

Under Mehul Choksi's leadership, the Gitanjali Group transitioned from primarily diamond trading and export to establishing a extensive retail network, beginning in the early 2000s with the launch of branded jewelry outlets under names like Gili and Asmi. By 2013, the company announced plans to open 550 additional stores in India and abroad by the end of that year, capitalizing on growing domestic demand for organized retail jewelry. This domestic push culminated in a network exceeding 4,000 outlets across India by the mid-2010s, focusing on affordable diamond and gold jewelry to capture middle-class consumers. In 2016, Gitanjali outlined ambitions to double its overall retail footprint to 10,000 stores, emphasizing consolidation and supply chain integration to enhance end-consumer access. Internationally, Choksi directed expansions into key markets starting around 2006, including scouting acquisitions for retail presence in the , the largest consumer of jewelry. By 2016, the group planned to add 50 stores in the , aiming to increase its footprint there by 50 percent through targeted growth in high-demand regions. In the , invested $75 million in the UAE, opening its first store in Dubai's Lamcy Plaza with intentions to scale to 110 outlets across the Arab Gulf within two years, leveraging the region's affluent buyer base for luxury exports. The company also ventured into by acquiring Italian jewelry brands such as Valente, Stefan Hafner, Nouvelle Bague, Io Sì, and Porrati, integrating them into its global portfolio to bolster design capabilities and market reach. These moves complemented 's core export operations, which had established it as a major supplier of polished and finished jewelry to overseas buyers since the .

Punjab National Bank Fraud Case

Mechanism of the Alleged Fraud

The alleged fraud centered on the fraudulent issuance of Letters of Undertaking (LoUs) by Punjab National Bank's (PNB) Brady House branch in Mumbai, which served as guarantees for short-term credit extended by overseas branches of Indian banks to companies controlled by Mehul Choksi and his nephew Nirav Modi. LoUs, typically valid for 90 days under Reserve Bank of India guidelines, allowed importers like Choksi's Gitanjali Gems to secure buyer’s credit for purchasing diamonds and gold without immediate payment, with PNB promising to honor any defaults. Between March 2011 and November 2017, PNB officials issued over 1,200 LoUs—most fraudulent—totaling approximately ₹13,000–14,000 crore in exposure, enabling Choksi's firms to obtain credit from foreign entities such as Allahabad Bank in Singapore and State Bank of India in Mauritius. Bank insiders, including deputy manager Gokulnath Shetty and manager Manoj Kharat, colluded with representatives of Choksi and Modi by generating unauthorized SWIFT messages to confirm the LoUs to overseas lenders, while deliberately bypassing PNB's system () and failing to secure required margins, collateral, or board approvals. This manual override exploited a gap between the messaging network—used for international communications—and the , preventing the liabilities from appearing in PNB's internal records or triggering risk alerts. Funds obtained via these credits were allegedly diverted for non-trade purposes, such as investments or luxury asset purchases, rather than legitimate imports. To sustain the scheme, new LoUs were issued to roll over expiring ones, creating a cycle of debt concealment akin to a Ponzi structure, with at least 150–165 fraudulent LoUs and 58 foreign letters of credit processed in 2017 alone. The fraud evaded detection for over six years due to repeated external audits by 18 firms overlooking the discrepancies, inadequate SWIFT-CBS integration mandated by RBI only post-scam, and the insiders' suppression of transaction logs. When defaults mounted, PNB disbursed over ₹6,300 crore to foreign banks honoring the guarantees by mid-2018, crystallizing the loss. chargesheets attribute the orchestration to Choksi as Group's promoter, alleging he directed the misuse through proxies.

Discovery and Initial Investigations

In January 2018, (PNB) officials at its Prapul branch in Mumbai's Fort area detected irregularities in the issuance of Letters of Undertaking (LoUs) during the processing of a fresh request from entities linked to and Mehul Choksi. The bank had demanded full margin money for the new LoUs, which the importers failed to provide, prompting scrutiny of transaction records and revealing unauthorized messages that bypassed the core banking system, allowing fraudulent guarantees without corresponding liability entries. This discrepancy, involving LoUs issued since at least 2011 but accelerating from 2014, exposed a scheme where bank employees colluded to generate fake undertakings worth billions for overseas credit from other Indian banks. On January 29, 2018, PNB lodged a formal complaint with the (CBI), reporting initial fraudulent LoUs totaling ₹280.7 issued to three diamond trading firms associated with Modi and Choksi, marking the official onset of criminal probes. The CBI registered a (FIR) under sections of the for criminal conspiracy, cheating, and forgery, naming Choksi's entities among the beneficiaries, with preliminary findings indicating his firms had availed LoUs exceeding ₹7,000 through similar unauthorized channels. Concurrently, PNB notified the (RBI) of the fraud, which escalated to an estimated ₹11,400–13,500 exposure upon deeper audit of 150+ LoUs. Initial CBI investigations uncovered procedural lapses, including the role of deputy manager Gokulnath Shetty, who allegedly approved LoUs without supervisory oversight or system integration, facilitating the diversion of funds for imports that were never materialized or settled. Probes also highlighted Choksi's direct involvement via his companies, which rolled over expiring LoUs with new fraudulent ones to evade detection, though he had fled on January 4, 2018, complicating early apprehension efforts. The (ED) soon joined under the Prevention of Act (PMLA), tracing siphoned funds to overseas accounts and assets, while forensic audits confirmed the fraud's systemic exploitation rather than isolated errors. The (CBI) registered a (FIR) against Mehul Choksi on January 31, 2018, accusing him of defrauding (PNB) through the fraudulent issuance of 72 Letters of Undertaking (LoUs) totaling approximately Rs 13,500 (US$1.8 billion at the time), facilitated by unauthorized use of the messaging system at PNB's Brady House branch in between 2011 and 2017. The initial FIR pertained to Rs 280 , but investigations revealed the full scale, with Choksi's companies allegedly siphoning off Rs 6,800 via these instruments, which were used to secure overseas credit from other banks without collateral or board approval. Choksi faces charges under multiple sections of the (IPC), including Section 120B (), Section 420 ( and dishonestly inducing delivery of property), Sections 465, 467, and 468 ( of documents and valuable securities), and Section 471 (using forged documents as genuine), with an additional charge of criminal breach of trust under Section 409 added to the in March 2018, potentially carrying a term if convicted. The CBI filed its initial in May 2018 against Choksi, his companies, and accomplices, followed by supplementary chargesheets detailing the involving PNB officials like Gokulnath Shetty. The (ED) initiated parallel proceedings under the Prevention of Money Laundering Act (PMLA), 2002, attaching assets worth over Rs 2,500 crore belonging to Choksi and his entities by 2021, including properties linked to Gems, Gili , and brands, which had defaulted on loans exceeding Rs 2,500 crore from a of 17 banks. A special PMLA court in issued non-bailable arrest warrants (NBWs) against Choksi in March 2018, with additional open-ended warrants in 2021; the ED also filed an application on July 10, 2018, to declare him a under the Fugitive Economic Offenders Act. Legal actions extended internationally after Choksi fled on January 4, 2018; issued a red notice, and Indian agencies shared warrants with foreign counterparts, leading to his in , , on April 11, 2025, pursuant to a CBI extradition request. The Court of Appeals ruled on October 17, 2025, that the offenses—spanning , , and related crimes from December 31, 2016, to January 1, 2019—are extraditable under Belgian law, rejecting Choksi's claims of political bias or unfair trial risks in , paving the way for his return to face trial.

Defenses and Counterarguments

Choksi's Claims of Legitimacy

Choksi has maintained that the Letters of Undertaking (LoUs) issued by (PNB) to his companies, totaling approximately ₹6,345 , facilitated legitimate import transactions for , jewelry, and related goods, rather than fraudulent activities. In a public dated February 23, 2018, addressed amid emerging allegations, he explicitly denied defrauding PNB, describing the claims as "false allegations" and asserting that his business operations with the bank were conducted in without intent to deceive. Through legal filings and statements via his representatives, Choksi has argued that the LoUs represented standard trade finance instruments approved by PNB officials, backed by genuine supplier contracts and import documents, and that any irregularities stemmed from the bank's internal systemic failures, such as unintegrated SWIFT messaging with its core banking system, rather than collusion or misrepresentation on his part. Gitanjali Gems, his flagship company, echoed this position in early 2018 statements, denying any fraud and emphasizing that the transactions involved real business dealings with overseas importers and exporters, not circular or sham trades. Choksi has further contended that he was unaware of unauthorized duplicate LoUs being issued between 2011 and 2017, attributing the oversight to PNB's procedural lapses and potential rogue actions by employees, whom he claims exploited vulnerabilities without his knowledge or complicity. In submissions to Indian courts, including efforts to quash non-bailable warrants in 2019, his legal team reiterated the absence of criminal intent (), positioning him as a victim of a involving insiders and possibly business rivals, rather than the architect of deliberate deception. These defenses have been rejected by investigating agencies like the (CBI), which allege documentary fabrication and fund diversion, but Choksi has upheld them consistently in public and judicial forums.

Evidence of Banking Systemic Failures

The attributed the fraud, involving fraudulent Letters of Undertaking (LoUs) worth approximately ₹11,400 crore issued to entities linked to Mehul Choksi, to operational risks stemming from employee delinquency and a fundamental failure of internal controls. This assessment highlighted that the bank's systems lacked the robustness to prevent or detect unauthorized transactions over seven years, from 2011 to 2018. A primary systemic lapse was the absence of integration between PNB's SWIFT messaging system—used for issuing LoUs—and its software, which prevented the automatic recording of liabilities and evaded routine s. Despite RBI advisories in mandating SWIFT audits and reconciliations, PNB's Brady House branch in failed to implement daily reconciliations of SWIFT messages, a standard protocol that would have flagged the 293 fraudulent LoUs. Internal memos from 2012 and identifying weak audit practices were not acted upon, allowing irregularities such as exceptional transaction volumes of $3.3 billion in the fiscal year ending March 2017 to go uninvestigated. Further evidence of oversight deficiencies included the lack of policies, with key staff retained in sensitive roles for extended periods—such as one official serving seven years at Brady House despite a three-year transfer norm—which facilitated potential without fresh scrutiny. Regional offices issued false compliance certificates, reporting only partial monthly data (e.g., 2 out of 12 reports in 2017) while certifying full adherence, underscoring breakdowns in hierarchical monitoring across 54 officials from clerks to regional heads. Concurrent, statutory, and RBI-mandated audits repeatedly failed to detect these issues, as LoUs were issued without required sanctions, collateral verification, or dual authorizations, violating prudential norms. These interconnected failures, rather than isolated errors, enabled the fraud's scale and duration, prompting RBI to initiate a supervisory review of PNB's controls.

Flight from India and International Movements

Departure and Acquisition of Foreign Citizenship

Mehul Choksi obtained citizenship of on November 16, 2017, through the country's Citizenship by Investment Unit program, which grants in exchange for economic contributions following a vetting process. The Antiguan authorities later stated that their 2017 revealed no adverse information on Choksi at the time of approval. Choksi took the for this citizenship on January 15, 2018, shortly after leaving . Choksi departed on January 4, 2018, days before the fraud allegations became public on February 14, 2018. He first traveled to the before proceeding to , where he resided under his newly acquired citizenship. Indian authorities maintain that Choksi remains an Indian citizen, as he has not formally renounced his original nationality under Indian law.

Residence in Antigua and Subsequent Relocations

Choksi established residence in following his departure from on January 2, 2018, initially transiting through the before settling there later that year. He had acquired in the country through its Citizenship by Investment program, with his application received in May 2017 and approval granted on November 16, 2017. Indian authorities have disputed the validity of this citizenship, asserting that Choksi remained an Indian citizen as he did not formally renounce his original nationality until December 2018, after fleeing. In May 2021, Choksi disappeared from amid an alleged abduction by individuals linked to his partner, leading to his in neighboring on May 23 for while reportedly attempting to flee by boat toward . Choksi's legal team claimed he was forcibly taken from , subjected to torture, and transported against his will, though Dominican authorities treated the detention as a standard violation. He was granted bail by the on July 12, 2021, after charges of were dropped, allowing his return to on July 15, where he resumed residence. The later ruled in April 2023 that he could not be forcibly deported, upholding his right to remain despite government efforts to revoke his status. Choksi continued residing in until approximately 2024, when he relocated to , , leveraging his wife's Belgian citizenship to obtain a residency permit on November 15, 2023, under medical treatment grounds. This move followed the revocation of his Red Notice in March 2023 and aligned with ongoing evasion of Indian extradition requests, though Belgian authorities confirmed his presence there as a resident prior to subsequent legal actions.

Extradition Proceedings and Recent Developments

Arrest in Belgium

On April 11, 2025, Mehul Choksi was arrested by Antwerp police in , following a formal extradition request submitted by India's in connection with the [Punjab National Bank](/page/Punjab National Bank) fraud case. The detention occurred near Choksi's residence in , where he had relocated in 2023 after departing , holding citizenship from the latter but lacking Belgian nationality. Belgian authorities publicly confirmed Choksi's custody on , 2025, marking the culmination of 's multi-year pursuit of the fugitive diamantaire accused of orchestrating fraudulent letters of undertaking worth approximately ₹13,000 crore. Choksi, who fled in early 2018 amid the unfolding scam investigation, had evaded capture despite prior arrests in other jurisdictions, including in 2021. The arrest prompted immediate legal proceedings under Belgium's framework, with Choksi classified as a subject to dual criminality standards between and the European nation. Initial applications were denied, ensuring his continued detention pending further .

Belgian Court Rulings and Path to Extradition

The Court of Appeal in ruled on October 17, 2025, upholding a lower court's decision to approve the of Mehul Choksi to , determining that the offenses he is charged with—primarily and in the —are extraditable under Belgian law. The court explicitly rejected Choksi's arguments that his extradition would violate , finding no evidence of a serious risk of , political , or an unfair upon his return to . Choksi had contended that Indian authorities fabricated charges against him due to political motivations and that prison conditions in posed threats to his health and safety, including allegations of potential mistreatment or abduction-like scenarios; however, the appeals deemed these claims unsubstantiated and irrelevant to the extradition criteria, emphasizing that Belgium's obligations under the India-Belgium prioritize the dual criminality of the acts involved. Indian authorities supported their case with a sworn from the (CBI), assuring compliance with international standards for fair trial and humane treatment, which the Belgian judges cited as sufficient to dispel concerns over or . Following the ruling, Choksi retains the option to file a final appeal with Belgium's (Court of Cassation), which could delay but not necessarily halt the process; if no further appeals succeed or are pursued, Belgian authorities are obligated to execute the order, paving the way for Choksi's transfer to face trial in on charges involving approximately ₹13,000 crore in fraudulent letters of undertaking issued through . This decision marks a significant advancement in India's long-standing efforts to repatriate Choksi, who has been a since fleeing in 2018, amid ongoing diplomatic coordination between the two nations to ensure procedural compliance.

Impact and Broader Context

Economic Consequences of the Case

The (PNB) fraud involving Mehul Choksi resulted in direct financial losses of approximately ₹14,000 to the bank through the issuance of fraudulent Letters of Undertaking (LoUs) between 2011 and 2018. These unauthorized guarantees enabled Choksi's companies, primarily under Gems, to secure overseas credit from other Indian banks without collateral or messaging verification, leading to defaults when the scheme unraveled in 2018. Recovery efforts by PNB and the (ED) have yielded minimal returns relative to the scale of the fraud. As of October 2020, the bank reported zero cash recovery from Choksi or associated entities through auctions or direct repayments, despite asset attachments exceeding ₹6,000 by the ED. More recently, in June 2025, a court permitted the release of ₹66.33 in assets linked to Choksi's nephew for restitution to PNB, but such piecemeal recoveries have not offset the principal loss, leaving taxpayers—via bank ownership—to bear the bulk of the burden through provisioning and capital infusions. The triggered an immediate decline in PNB's share , which plummeted over 30% in the days following the public disclosure on January 29, 2018, and as of April 2025, remained below pre-fraud levels, reflecting sustained investor skepticism toward the bank's . This erosion extended to Gems, Choksi's flagship firm, whose shares crashed over 90% post-scam revelation, culminating in its admission of in 2018 and liquidation proceedings that further diminished shareholder value. On a macroeconomic scale, the PNB fraud amplified existing pressures on India's banking system, contributing to heightened non-performing asset (NPA) ratios and necessitating additional government recapitalization of state-owned banks, which totaled over ₹3 between 2017 and 2020 to stabilize the sector amid fraud exposures. Analysts, including , revised India's GDP growth forecast downward by 0.4 percentage points to 7.6% for 2018-19, citing the scam's role in tightening conditions, particularly for import-dependent sectors like jewelry, and undermining lending confidence. The episode, part of a broader wave of bank frauds costing banks at least ₹22,700 over the prior five years, strained fiscal resources and highlighted vulnerabilities in mechanisms, indirectly curbing expansion and economic momentum in trade-financed industries.

Implications for Indian Banking Reforms

The (PNB) involving Mehul Choksi's revealed critical lapses in oversight, particularly the issuance of unauthorized Letters of Undertaking (LoUs) without collateral or system integration, enabling Choksi-linked entities to secure approximately ₹7,000 in fraudulent credit from overseas branches between 2011 and 2017. These deficiencies in banks' internal controls and reconciliation processes amplified non-performing assets (NPAs) and eroded lender credibility, prompting regulatory intervention to address systemic vulnerabilities in credit extension and detection. In direct response, the (RBI) prohibited banks from issuing LoUs and Letters of Comfort for trade credits effective March 13, 2018, closing the primary loophole exploited in the scam to curb unauthorized short-term credit for imports. This measure shifted reliance to more secure instruments like Letters of Credit, though it temporarily disrupted import financing for sectors like gems and jewelry, highlighting trade-offs in regulatory tightening. The episode accelerated enhancements in fraud governance, with RBI mandating public sector banks to integrate messaging with systems, establish centralized fraud registries, and report frauds exceeding ₹1 to the within 21 days for real-time monitoring. These steps aimed to prevent between staff and borrowers, as seen in the involvement of PNB employees who bypassed authorization protocols, and fostered robust frameworks across state-owned lenders. Furthermore, the Choksi case underscored challenges in pursuing cross-border defrauders, influencing the enactment of the Fugitive Economic Offenders Act (FEOA) in 2018, which enables confiscation of assets from individuals evading prosecution in economic crimes exceeding ₹100 , with Choksi and associates later targeted under its provisions for asset recovery. This legislation addressed delays in and asset attachment, complementing probes that attached over ₹329 in related properties by 2020. Overall, the intensified scrutiny on banks' operational risks, catalyzing a shift toward technology-driven oversight and stricter , though persistent NPAs indicate ongoing needs for deeper structural reforms in lending prudence and .

References

  1. https://indianexpress.com/article/cities/mumbai/pnb-fraud-case-ed-restitution-properties-9717726/
  2. https://economictimes.indiatimes.com/news/india/2-bn-scam-in-2018-to-arrest-in-2025-a-timeline-of-indias-biggest-banking-scam-by-mehul-choksi-nirav-modi/articleshow/120271193.cms
  3. https://indianexpress.com/article/explained/punjab-national-bank-nirav-modi-fraud-how-the-system-was-gamed-5069107/
  4. https://economictimes.indiatimes.com/news/india/explainer-how-nirav-modi-cheated-pnb-of-rs-14000-crore-through-fraudulent-lous/articleshow/95410291.cms
  5. https://antiguaobserver.com/belgian-court-approves-extradition-of-mehul-choksi-to-india/
  6. https://lawchakra.in/other-courts/pnb-fraud-mehul-choksi/
  7. https://indianexpress.com/article/explained/belgian-court-mehul-choksi-extradition-5-things-pnb-scam-10314247/
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