New Delhi: Fugitive diamond merchant Mehul Choksi has been denied bail by a court in Belgium, raising hopes of his extradition to India to face trial for an over Rs 6,300 crore fraud involving the Punjab National Bank (PNB).
The court, while hearing Choksi’s plea, said he had previously escaped from several countries to avoid legal action and could flee again if released on bail. If he manages to flee Belgium, Indian agencies will have to start the whole process for his extradition all over again.
The 66-year-old owner of Gitanjali Group, was arrested in Belgium in April after India’s Central Bureau of Investigation (CBI) requested his extradition. He had earlier applied for bail, which was denied. Choksi made another request on August 22 to stay under house arrest, but this too was rejected.
His extradition hearing is scheduled for mid-September in Belgium, where the CBI will help present evidence to bring him back to India for trial. Choksi and his nephew Nirav Modi are accused of a Rs 13,000-crore fraud at PNB, allegedly involving fake Letters of Undertaking (LoUs) and collusion with some bank officials.
Nirav Modi, declared a fugitive economic offender, has been in a London jail since 2019 and is also fighting extradition to India.
The CBI has sent a team to Brussels with case details and evidence. They will also hire a European law firm to support the extradition case. Choksi is charged under Indian laws for criminal conspiracy, cheating, and corruption. Since these acts are crimes in Belgium as well, India can use the extradition treaty. The CBI also cited international agreements against corruption and organized crime.
Indian authorities have shared open-ended arrest warrants from 2018 and 2021 with Belgium. According to the CBI, in 2017, PNB officials in Mumbai issued 165 LoUs and 58 Foreign Letters of Credit (FLCs) to Choksi’s companies without proper limits or accounting.
Choksi took money from foreign banks with the help of these guarantees but never repaid. In the end, PNB had to pay over Rs 6,344 crore (around $965 million) to cover the loans.