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A court in Antwerp, Belgium, on Friday cleared the extradition of fugitive diamantaire Mehul Choksi, marking a major breakthrough for India in the Rs 13,000-crore Punjab National Bank (PNB) fraud case. Officials said the court upheld the validity of Choksi’s arrest made by Belgian authorities on India’s request earlier this year.“The order has come in our favour. The court has termed his arrest by the Belgian authorities on India’s request valid. The first legal step in getting him extradited is now clear,” a senior official told reporters, as per PTI.Choksi, 66, was arrested in Belgium on April 11, based on an extradition request sent by the Central Bureau of Investigation (CBI). His bail pleas have since been rejected by several Belgian courts. He now has the option of appealing the extradition order in a higher court.Belgian prosecutors, backed by officials from ministry of external affairs and the CBI, presented detailed evidence of Choksi’s alleged role in orchestrating the massive bank fraud in collusion with his nephew, Nirav Modi.The prosecutors argued that Choksi poses a flight risk and should not be released from custody. After hearings in mid-September, the court concluded that his arrest and continued detention were valid under Belgian law.
How India plans to keep Mehul Choksi?
To address humanitarian and procedural concerns, India has assured Belgian authorities that Choksi would be kept in humane conditions at Mumbai’s Arthur Road Jail if extradited.According to a communication sent by the Union Home Ministry on September 4, Choksi would be housed in Barrack No. 12, a section that meets European standards of detention. India promised “a high level of security and hygiene,” with daily cleaning, access to fresh drinking water, and supervised outdoor recreation.The cell itself measures around 20 feet by 15 feet, fitted with ventilators and a grilled main door to ensure proper air circulation. It includes a separate toilet and washroom, and inmates are provided with a thick cotton mat, pillow, bedsheet, and blanket. The government assured that the cell would be cleaned and mopped daily, with access to fresh drinking water. Security measures would remain stringent at all times, and Choksi would be allowed daily exercise and recreation as per prison rules.Officials also highlighted the availability of several amenities to maintain the mental and physical well-being of inmates. These include board games such as chess and carrom, badminton, and Art of Living yoga sessions conducted regularly within the barrack.Prisoners are also given access to daily newspapers in English and regional languages, television channels, video-conferencing facilities, and telemedicine services. Family visits are permitted once a week, while meetings with legal counsel can take place daily.The ministry assured Belgium that there would be no overcrowding or solitary confinement, and the barrack offers facilities like yoga sessions, newspapers, board games, television, and regular family and lawyer visits.“The personal living space for each inmate in Barrack No. 12 fully meets the minimum space requirement of the Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (CPT) of Europe,” the letter stated.
What is the Punjab National Bank scam?
The PNB scamuncovered in early 2018, is one of India’s largest banking frauds, amounting to more than Rs 13,000 crore. It involved fraudulent issuance of Letters of Undertaking (LoUs) by officials at PNB’s Brady House branch in Mumbai, which allowed Nirav Modi and Mehul Choksi’s companies to obtain credit from overseas banks without proper collateral or approval.LoUs are essentially bank guarantees issued on behalf of a client to a foreign lender. If the borrower defaults, the liability falls on the issuing bank.According to the CBI’s charge sheet, two bank officials—Deputy Manager Gokulnath Shetty and Clerk Manoj Kharat—misused the bank’s SWIFT system to send unauthorized LoUs directly to overseas banks, bypassing PNB’s core banking system. This allowed the fraud to go undetected for several years.Between March and April 2017 alone, 165 LoUs and 58 Foreign Letters of Credit (FLCs) were issued to companies linked to Choksi and Nirav Modi. As a result, several foreign branches—including SBI (Mauritius and Frankfurt), Allahabad Bank (Hong Kong), Axis Bank (Hong Kong), Bank of India (Antwerp), and Canara Bank (Manama)—provided loans that were never repaid.When the fraud was uncovered, PNB had to pay Rs 6,344.97 crore ($965 million) to settle the dues with foreign banks, including interest.
How the scam came to light?
The fraud came to light in January 2018 when PNB demanded full margin money for issuing new LoUs, prompting Nirav Modi’s firms to reveal they had previously received them without collateral. An internal inquiry exposed the misuse of the SWIFT system and led to the bank’s formal complaint to the CBI on January 29, 2018.Investigations revealed that the transactions were circular and fictitious, with no real import or export of diamonds and jewellery.Following the exposure of the scam, Nirav Modi fled to the UK and was arrested in London in March 2019. He has since been held at Wandsworth Prison, fighting extradition to India. In February 2021, a London court approved his extradition, but Modi continues to appeal the decision.Choksi, meanwhile, escaped to Antigua and Barbuda in 2018, where he obtained citizenship. He was detained in Belgium earlier this year, reportedly while seeking medical treatment. Both Choksi and Modi have been declared “Fugitive Economic Offenders” under India’s 2018 law, enabling authorities to seize and sell their assets.The Enforcement Directorate (ED) has already attached assets worth Rs 2,565.9 crore linked to Choksi. India’s agencies, including the CBI, ED, and MEA, coordinated closely with Belgian authorities under the United Nations Convention against Transnational Organized Crime (UNTOC) and the UN Convention against Corruption (UNCAC). They also shared open-ended arrest warrants issued by a Mumbai court in 2018 and 2021.
