#pnbscam

Detailed architectural drawings and interior images of Mumbai’s high-security Arthur Road Jail, where fugitive businessman Mehul Choksi would be lodged if extradited, have been presented before a Belgian court as part of India’s affidavit assuring humane detention conditions. Read More...

SEBI Freezes Mehul Choksi’s Assets in ₹2.1 Cr Insider Trading Case

India’s capital markets regulator, SEBI, has taken firm action against fugitive businessman Mehul Choksi, ordering the attachment of his domestic bank accounts and mutual fund holdings. The goal? Recover ₹2.10 crore in unpaid dues related to a 2022 insider trading violation involving Gitanjali Gems.

Choksi, still under detention in Belgium and wanted in the ₹14,000 crore PNB scam, failed to respond to a 15-day notice from SEBI. The regulator has now asked Indian banks and mutual funds to freeze all linked accounts, submit documentation, and block any outgoing transactions.

While the amount may seem minor compared to the fraud he’s accused of, this enforcement reflects a growing push to bring financial offenders to account — no matter how far they’ve fled.

The arrest of Mehul Choksi, a key figure in one of India’s largest banking scams, has sent ripples through the financial world. Choksi, once the head of Gitanjali Group, a major jewelry firm, was detained in Belgium on April 12, 2025, following a request from Indian authorities, including the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). His arrest is tied to his involvement in the notorious Punjab National Bank (PNB) fraud case, which is estimated at a staggering Rs 13,850 crore.

Who Is Mehul Choksi?

Mehul Choksi, born in 1959, is a former Indian businessman with deep roots in the diamond industry. He gained prominence as the owner of Gitanjali Group, which operated numerous jewelry brands. However, his reputation crumbled after his involvement in the PNB fraud came to light. Before the scam was uncovered, Choksi fled India in January 2018, initially seeking refuge in the United States, before obtaining citizenship in Antigua and Barbuda.

Since his departure, Indian authorities have been relentless in their pursuit of Choksi, aiming to bring him back to face trial for his role in the massive financial fraud.

The Punjab National Bank Scam: A Deeper Look

The PNB scam, which came to light in 2018, involved Mehul Choksi and his nephew Nirav Modi, both of whom were able to manipulate the banking system for personal gain. The fraud centered around the use of Letters of Undertaking (LoUs), a form of bank guarantee, to acquire short-term credit from foreign banks.

Between 2011 and 2018, Choksi and Modi used these LoUs without following proper procedures, with the help of a few complicit bank officials. These LoUs were not entered into the bank’s main system, allowing the fraud to go undetected for years. The money, which was ostensibly meant for importing goods, was never repaid and was instead used for personal and business expenses. In total, Choksi’s Gitanjali Group was responsible for approximately Rs 6,097 crore of the fraud, while Modi’s companies accounted for Rs 6,498 crore.

The Response from Indian Authorities

Once the scam was exposed, the CBI and ED sprang into action, filing criminal cases and launching investigations. Gitanjali Gems and related companies were shut down, and their assets were seized. The ED also discovered that a significant portion of the stolen funds had been transferred abroad using shell companies, which were designed to launder money and obscure the true origin of the funds.

In September 2024, Indian authorities, along with PNB and ICICI Bank, received permission from a Special PMLA Court to sell assets worth Rs 2,565 crore. These assets, belonging to the Gitanjali Group, were auctioned off, and the proceeds are being held in fixed deposits by the banks.

Priti Choksi’s Role in the Scam

Mehul Choksi’s wife, Priti Choksi, has also come under scrutiny for her involvement in the fraudulent activities. Reports indicate that she played an active role in hiding the illicit funds. In 2013, Priti, in collaboration with CD Shah of Magus Consultancy, established three offshore companies: Charing Cross Holdings Ltd, Colindale Holdings Ltd, and Hillingdon Holdings Ltd. These companies were based in jurisdictions where ownership records were difficult to trace.

Hillingdon Holdings, where Priti was named the Ultimate Beneficial Owner, later became the sole shareholder of Goldhawk DMCC, a company in the UAE. This company held three high-value properties in Dubai’s Almas Tower, worth over Rs 22.5 crore, which were allegedly purchased with money from the scam. The ED traced the funds through transactions made by Asian Diamonds and Jewellery FZE, a part of the Gitanjali Group. These properties were seized in 2019, but they remain under the name of the shell company, Diminico DMCC.

Conclusion

Mehul Choksi, once a prominent figure in India's diamond industry and the head of Gitanjali Gems, has been arrested in Belgium, marking a significant development in one of India's biggest banking frauds—the Rs 13,850 crore Punjab National Bank (PNB) scam.

The PNB Scam: How It Unfolded

The scandal, involving Choksi and his nephew Nirav Modi, was uncovered in 2018 and is considered one of the largest banking frauds in India’s history. Choksi and Modi used fraudulent Letters of Undertaking (LoUs) to secure loans from foreign banks, which they never repaid. These LoUs, typically issued by banks to guarantee credit, were used to mislead banks, resulting in a massive financial loss. The scheme involved PNB's Mumbai branch and continued undetected for years due to internal complicity and procedural lapses.

Choksi fled India in 2018, first traveling to the United States before obtaining citizenship in Antigua and Barbuda in 2017. Since then, Indian authorities have sought his extradition to face charges related to the fraud.

The Arrest and Legal Pursuit

On April 12, 2025, Choksi was arrested by Belgian authorities after a request from Indian agencies, including the CBI and Enforcement Directorate. He was detained while receiving medical treatment in Belgium. The arrest marks a crucial step in the ongoing effort to bring him to trial for his involvement in the scam.

The Financial Impact of the Fraud

The total value of the fraud amounted to Rs 13,850 crore, with the Gitanjali Group under Choksi’s leadership responsible for Rs 6,097 crore, while Modi’s entities accounted for Rs 6,498 crore. The remaining amount includes interest and other charges.

Investigative Efforts and Asset Recovery

Following the scam's exposure, the Enforcement Directorate froze assets, raided offices, and seized properties linked to Choksi’s companies. In September 2024, a Mumbai court authorized the sale of assets worth Rs 2,565 crore, which were connected to the Gitanjali Group. The proceeds from these auctions are now held in fixed deposits by the banks involved.

The Role of Priti Choksi

Mehul Choksi’s wife, Priti, has also been implicated in the scandal. Reports suggest her involvement in setting up offshore shell companies that helped launder the ill-gotten funds. These companies were linked to properties worth over Rs 22.5 crore in Dubai, which were later seized by Indian authorities.

The Road Ahead

With Choksi’s arrest, authorities hope to bring an end to the long-running saga of the PNB fraud. However, the legal battle is expected to be complex, and it remains to be seen whether Choksi will be extradited to India to stand trial.