Mehul Choksi Detained in Belgium: India Moves Forward in ₹13,000 Crore PNB Scam

KK SharmaApril 15, 2025 - 10:40 AM

Mehul Choksi Detained in Belgium: India Moves Forward in ₹13,000 Crore PNB Scam

Extradition Case: The arrest in Antwerp represents a major event in a years-long bank fraud case.

In one of India’s biggest financial scams, diamond trader Mehul Choksi has been detained in Belgium after a formal extradition request was placed by Indian authorities. According to official sources, the arrest of Choksi took place over the last weekend, giving the Indian authorities a breakthrough in the matter after
tracking him through diplomatic and legal means for several months. This is a breakthrough in the ₹13,000 crore Punjab National Bank loan fraud case first made public in 2018.

A Fugitive Cornered in Belgium

Reportedly, Choksi, who had been staying in Antigua after absconding from India in 2018, was last traced in Belgium last year for treatment.

His travelling to Antwerp made an Indian agency have a meeting or produce a document on the Belgium’s side to enforce his detention and extradition. Choksi’s Interpol Red Notice was canceled, which took off his cover-from arrest and Indian agencies like CBI and ED started looking into alternative means by which the fugitive could be apprehended.

The primary basis for the extradition request was the two non-bailable warrants issued against him by a special court in Mumbai in 2018 and 2021.

India’s Case Against Choksi: The Anatomy of the Fraud

The PNB scam, which rocked the Indian banking sector in 2018 describes a heinous Fiji operation where fraudulent Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs) were issued by the bank officials in PNB’s Brady House branch in Mumbai.

Choksi, for his actions along with his companies and the connivance of certain bank officials, circumvented the banking systems to obtain by fraudulent means, credit from overseas banks.

The CBI charge sheet states that in March-April 2017 alone, 165 LoUs and 58 FLCs were issued in favor of Choksi’s companies without sanctioned limits, collateral or any proper banking procedure.

These guarantees allowed his companies to draw funds from the foreign banks in the following manner: SBI Mauritius, Allahabad Bank Hong Kong, Axis Bank Hong Kong, Bank of India Antwerp, Canara Bank Manama and SBI Frankfurt.

The fraudulent credit lines were concealed from PNB’s central banking system and thus evaded internal checks, thereby preventing timely detection of the scam.

With defaults in repayments, the forward transaction is extended, thereby encouraging the company and the international buyer to continue their dealings through discounts for deferred payment and extras whereas the exact opposite is done when the document is prepaid-before due in the local bank.

Legal Actions and Increasing Pressure

In the years since the exposure of the fraud, Indian authorities have taken aggressive actions. Although CBI has filed two charge sheets, the ED has filed three prosecution complaints against Choksi.

The Enforcement Directorate or ED froze or attached assets worth ₹2,565.90 crores belonging to Choksi and his firms, however, the court already granted permission for the monetization of these properties. This is very similar to the case of his

nephew, Nirav Modi, who is in jail in London.

Like the extradition requests that he has made before Indian agencies regarding Modi, he was arrested in 2019 and he still contests his return to India, delaying his extradition further.

Health Grounds and Legal Loopholes: Defense Strategy of Choksi

Although detained, Choksi is likely to apply for bail on medical grounds which he has used before to delay proceedings. Formally, the paperwork is ongoing in Belgium while the Indian authorities work toward securing his return under the applicable

extradition treaty and bilateral legal framework.

Authorities, therefore, remain hopeful but cautious. First, such breakthroughs were few and far between, with past failures and the lifting of the Interpol Red Notice serving to bolster the current fight in Belgium. If extradited successfully, Chokshi would join other culprits who have been brought back to face trial in Indian courts.

The Bigger Picture: Accountability in High-Profile Frauds

If proven, the PNB fraud case will serve as the litmus test for the Indian state’s ability to bring disreputed businessmen to book regarding white-collar crimes.

The enormity of the scam, the multi-national nature of the probe, and the involvement of major global banks have shrieked the need for stringent regulatory mechanisms and tougher enforcement of anti-fraud protocols in India’s banking sector.

The focus will now shift to court cases in Belgium and, ultimately, India, where the argument involving Choksi will get subsumed. For Indian agencies, it is indeed a hard-earned victory in a long chase. But for the millions affected by financial crimes,it is also an important reminder of the distance yet to be traveled before justice is
delivered.

All eyes will remain trained on Belgium during the extradition process, where fate could soon be sealed for Mehul Choksi—and with him, a vital chapter in India’s fight against economic crime.