In a significant development with far-reaching implications for India’s fight against economic offenders, fugitive diamantaire Mehul Choksi has been arrested in Belgium on the request of Indian authorities. The arrest marks a potential turning point in a saga that has spanned continents, legal battles, and diplomatic wrangling, centering around one of the biggest financial scandals in India’s banking history.
The Arrest in Belgium
Choksi, who had been on the run since early 2018, was taken into custody in Belgium after Indian agencies—namely the Enforcement Directorate (ED) and Central Bureau of Investigation (CBI)—formally pursued extradition proceedings. His arrest comes after an Interpol Red Notice against him was recently deleted, a move that seemingly complicated India’s efforts to bring him to justice. However, Indian authorities swiftly recalibrated their strategy, lodging a formal request with Belgian counterparts that has now yielded results.
According to reports, Choksi had been residing in Antwerp with his wife Preeti Choksi, having secured an ‘F Residency Card’ in Belgium on November 15, 2023. The card was allegedly obtained using fabricated documents and false declarations, with Choksi reportedly concealing his Indian and Antiguan citizenships. Indian authorities have accused him of misrepresenting his nationality during the residency application process—a move viewed as a calculated attempt to evade extradition.
Sources claim Choksi was planning a relocation to Switzerland under the guise of seeking medical treatment for suspected cancer. His lawyer had even informed a Mumbai court that he was in Belgium for treatment purposes. However, this narrative did little to deter Indian enforcement agencies, who were actively tracking his movements.
The Scam That Shook India
Mehul Choksi, founder of Gitanjali Gems, is at the center of the ₹13,500-crore Punjab National Bank (PNB) fraud, along with his nephew Nirav Modi. The fraud was exposed in 2018 and sent shockwaves through India’s banking sector. At its core, the scam revolved around the fraudulent issuance of Letters of Undertaking (LoUs) from PNB’s Brady House branch in Mumbai.
LoUs are essentially bank guarantees that allow a company to raise short-term credit from overseas branches of Indian banks. In this case, they were issued without proper collateral and often without entering the details into the bank’s core systems—thanks to the complicity of a few rogue employees. Gokulnath Shetty, then Deputy General Manager of PNB, played a pivotal role in bypassing protocol and enabling these unauthorized transactions.
Between 2011 and 2017, Nirav Modi’s companies were able to obtain 1,212 such guarantees—far more than the 53 genuine ones they were entitled to. Investigators allege that instead of being used for importing goods, the funds raised through these guarantees were laundered and diverted. Mehul Choksi and his firms, including Gitanjali Gems, were allegedly direct beneficiaries of this illicit arrangement.
Legal Pursuits and International Maneuvering
Choksi fled India just days before the fraud came to light. He later surfaced in Antigua and Barbuda, where he had acquired citizenship under an investment program. Since then, India’s attempts to extradite him have faced legal roadblocks. A bizarre twist came in May 2021, when Choksi mysteriously disappeared from Antigua and was found in Dominica. He claimed he had been kidnapped and was trying to flee to Cuba—a claim that complicated diplomatic efforts to bring him back.
Meanwhile, Nirav Modi remains imprisoned in the UK, fighting his extradition from London. Multiple bail applications have been rejected, and the process has turned into a legal marathon.
In India, the ED and CBI have filed multiple charge sheets against Choksi, outlining a complex web of criminal conspiracy, fraud, and money laundering. The ED has also been seeking to declare him a Fugitive Economic Offender (FEO)—a designation that would allow the government to confiscate his assets. While Nirav Modi was declared an FEO in 2019, the plea against Choksi has been pending since 2018.
What Lies Ahead
Choksi’s arrest is a significant milestone, but the road to justice remains complex. The extradition process from Belgium will involve diplomatic dialogue and legal scrutiny. However, Indian authorities are optimistic, given the mounting evidence and Choksi’s questionable conduct in obtaining European residency.
This episode also underscores the importance of robust international cooperation in tackling financial crimes. As India strengthens its global stance against fugitive economic offenders, Choksi’s case serves as a high-profile example of the government’s resolve to bring white-collar criminals to book—no matter where they run.
