In a significant development in one of India’s biggest financial fraud investigations, absconding diamond businessman Mehul Choksi has been arrested in Belgium following an extradition request by Indian authorities. According to official sources, Choksi was detained by Belgian law enforcement on Saturday, April 12, 2025, based on an official request submitted by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). The arrest marks a crucial step forward in India’s efforts to bring back economic offenders who have evaded justice for years.
Mehul Choksi, the second prime accused in the ₹13,000 crore Punjab National Bank (PNB) fraud case after his nephew Nirav Modi, had been residing in Antigua and Barbuda since 2018, reportedly for medical treatment. He was located in Belgium last year, and Indian agencies had intensified efforts to have him extradited after an earlier Interpol Red Notice against him was withdrawn. Despite the deletion of the notice, the CBI and ED pursued legal channels to push for his return to India, submitting multiple arrest warrants issued in 2018 and 2021 to Belgian authorities as part of their extradition dossier.
Choksi is accused of orchestrating a massive scam at the Brady House branch of PNB in Mumbai, where his companies, including Gitanjali Gems, allegedly colluded with bank officials to fraudulently obtain Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs). These were issued without proper authorization, without any sanctioned credit limits, and without making entries in the bank’s core systems—allowing the fraud to remain undetected for an extended period. These fraudulent LoUs and FLCs were then used to secure foreign loans, which were never repaid, causing a direct loss to the bank.
During the period of March to April 2017 alone, PNB officials reportedly issued 165 LoUs and 58 FLCs that enabled Choksi’s firms to discount 311 bills internationally. The foreign banks that extended credit based on these documents include State Bank of India (Mauritius and Frankfurt branches), Allahabad Bank (Hong Kong), Axis Bank (Hong Kong), Bank of India (Antwerp), and Canara Bank (Manama). After the scam came to light and the borrowers defaulted, PNB had to repay ₹6,344.97 crore including overdue interest to the overseas lenders—highlighting the scale and global reach of the fraud.
The ED has been aggressive in its pursuit of Choksi and has already seized or attached assets worth ₹2,565.90 crore in the case. A special court in Mumbai has granted permission for the monetization of these assets to recover the losses suffered by the bank. Meanwhile, the CBI has filed two charge sheets, and the ED has filed three prosecution complaints against Choksi and others involved in the scam.
Legal experts believe that Choksi’s legal team may seek bail in Belgium on health grounds, but Indian authorities are hopeful that the detailed documentation and evidence submitted under the Mutual Legal Assistance Treaty (MLAT) will support a successful extradition. The case against Choksi is further strengthened by the ongoing proceedings against Nirav Modi in the UK, who has been fighting extradition from a London jail since 2019.
Choksi’s arrest has renewed focus on the Indian government’s commitment to bringing back fugitive economic offenders and holding them accountable. The government has consistently emphasized the importance of tracking and recovering public money siphoned off through fraudulent schemes. This arrest is a step in that direction and showcases the increasing success of India’s diplomatic and legal efforts on the global stage.
As the legal process unfolds in Belgium, Indian agencies are coordinating with their counterparts to expedite the extradition. This development not only revives the spotlight on the PNB scam but also reinforces India’s stance on cross-border financial crime. With high-profile cases like those of Vijay Mallya and Nirav Modi still pending, Choksi’s detention is being seen as a potential turning point in India’s broader crackdown on financial defaulters hiding overseas.
Stay tuned to ibizznews for further updates.
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