Fugitive diamantaire Mehul Choksi, one of the main accused in the ₹13,850 crore Punjab National Bank (PNB) scam, has been arrested in Belgium — a country where he reportedly has family and business connections. This marks a significant development in India’s efforts to bring back the masterminds of what is still considered the country’s biggest banking fraud.
But what exactly is the PNB scam, and what role did Mehul Choksi allegedly play in it?
The Rise of Mehul Choksi
Mehul Choksi, born in Mumbai in 1959, took over the reins of his family-run jewellery business in the 1980s. Under his leadership, the Gitanjali Group expanded rapidly, operating thousands of retail outlets across India. His influence in the gem and jewellery sector grew steadily — and so did his financial ambitions. He is also the maternal uncle of Nirav Modi, another key figure in the PNB scam.
How the Scam Unfolded
The PNB fraud came to light in early 2018 when the state-owned bank reported unauthorized issuance of Letters of Undertaking (LoUs) from its Brady House branch in Mumbai. These LoUs allowed Mehul Choksi and Nirav Modi’s companies to secure loans from overseas branches of other Indian banks.
However, investigations revealed that these LoUs were issued without proper documentation or adherence to Reserve Bank of India (RBI) guidelines. Several PNB officials allegedly colluded to bypass internal systems. The scam, estimated at over ₹13,000 crore, had been running undetected between 2014 and 2017.
Shell Firms and Fake Credit
The companies that benefited from these fraudulent LoUs — including Gitanjali Gems, Diamond R US, Solar Exports, and Stellar Diamonds — were later found to be shell entities, with no genuine business operations. The funds raised through these fake guarantees were allegedly siphoned off or diverted.
The Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) launched a series of coordinated actions in 2018, freezing assets, issuing non-bailable warrants, and filing multiple charge sheets against Mehul Choksi and other accused.
Mehul Choksi’s Alleged Role
According to the charges, Mehul Choksi played a central role in orchestrating the scam. His company allegedly defrauded PNB of over ₹6,097 crore. He has been accused of criminal conspiracy, cheating, breach of trust, and money laundering. Authorities have also linked him to other defaults, including a $25.8 million loan default through a company connected to his brother in Belgium.
The ED claims to have seized assets worth over ₹2,500 crore — including luxury cars, properties, shares, and jewellery — all linked to Mehul Choksi and his associates. Multiple prosecution complaints have been filed in court to recover the funds.
A Life on the Run
Mehul Choksi became a citizen of Antigua and Barbuda in late 2017, just months before the scam became public. He fled India in January 2018, days before the case exploded into the headlines. Since then, he has remained out of reach of Indian authorities.
In 2021, he mysteriously vanished from Antigua and was later found in Dominica, reportedly trying to escape to Cuba by boat. However, his deportation to India was blocked by Dominican courts. Adding to India’s frustration, Interpol removed the Red Notice against Mehul Choksi in 2023, citing lack of clarity over his alleged abduction from Antigua.
Now, in 2024, his trail led to Belgium — home to a significant diamond trade hub and to members of Mehul Choksi’s extended family. His daughter is also married to a diamond merchant based in Antwerp.
Will Extradition Happen This Time?
Mehul Choksi’s arrest in Belgium offers India a new opportunity to bring him back. However, his legal team is expected to contest any extradition attempt, citing health issues and humanitarian grounds — a strategy they’ve employed in previous jurisdictions as well.
Meanwhile, Nirav Modi, his nephew and co-accused, has been in British custody since 2019. Despite losing his legal battle against extradition, he has not yet been brought back to India.
What Lies Ahead
Mehul Choksi’s arrest is certainly a breakthrough, but it’s just the beginning of another long legal process. Whether Indian authorities can successfully navigate Belgium’s legal system and counter Mehul Choksi’s expected appeals remains to be seen.
For now, though, this marks a rare moment where the net around one of India’s most high-profile economic fugitives appears to be tightening.
