In a significant breakthrough for Indian law enforcement agencies, Mehul Choksi, one of the main accused in the ₹13,500 crore Punjab National Bank (PNB) fraud case, has been arrested in Belgium. The 65-year-old fugitive diamond trader, who had been on the run since 2018, was apprehended by Belgian authorities following a formal extradition request from India's Central Bureau of Investigation (CBI) and active coordination with the Enforcement Directorate (ED).

Choksi's arrest, which took place on April 12, 2025, marks a crucial step in bringing to justice one of the most high-profile economic offenders in India. He is known for his links to the now-defunct Gitanjali Gems Ltd, a major jewelry retail company once listed on Indian stock exchanges.

The PNB Scam: A Brief Background

The case revolves around a massive fraud against the Punjab National Bank, where Choksi and his nephew Nirav Modi are accused of colluding with bank officials to fraudulently obtain Letters of Undertaking (LOUs). These LOUs were used to secure overseas credit without proper collateral or due process. This deception caused a wrongful loss of over ₹13,500 crore to the bank.

Choksi left India in January 2018, just weeks before the scam came to light. Interestingly, he had already obtained citizenship of Antigua and Barbuda in 2017, under their Citizenship by Investment Programme, raising serious questions about the ease with which fugitive economic offenders can gain safe haven abroad.

The Arrest in Belgium

According to sources, Choksi had been living in Antwerp, Belgium, alongside his wife Preeti Choksi, who is reportedly a Belgian citizen. While residing there, he used an “F Residency Card”, which gave him temporary residency rights. He is believed to have travelled to Belgium from Antigua, allegedly under the pretext of undergoing cancer treatment.

Investigations revealed that Choksi concealed both his Indian and Antiguan citizenships and was planning to flee to Switzerland, a country he presumably believed would offer him a legal shield. However, before he could carry out his escape, Belgian law enforcement agencies detained him, acting on an Indian extradition plea and cooperation via Interpol channels.

Choksi's arrest comes after the Interpol Red Notice against him was deleted, a development which could have allowed him freer movement across borders. However, Indian agencies acted swiftly, submitting fresh documents, proof of identity, and legal grounds to the Belgian government.

Charges Filed by Indian Agencies

The Enforcement Directorate (ED) and the CBI have filed multiple charge sheets against Choksi, accusing him and his firm Gitanjali Gems Ltd of committing acts of cheating, criminal conspiracy, money laundering, and violation of FEMA and PMLA laws. The ED claims that Choksi fraudulently got foreign letters of credit enhanced and diverted funds for personal and business use, causing a huge dent in India’s financial system.

Despite his repeated denials, Choksi has been accused of shielding assets, using shell companies to launder money, and misrepresenting facts about his citizenship and travel.

Previous Legal Troubles and Detention in Dominica

In 2021, Choksi was detained in Dominica, a Caribbean nation, while allegedly trying to reach Cuba by boat. He was held for 51 days, during which he claimed he was the victim of a political conspiracy. He further accused Indian agencies of abduction, torture, and illegal seizure of his properties.

However, the British Privy Council, Dominica's highest court, later granted him relief and release, allowing him to return to Antigua. Despite this, Choksi remained under international watch and subject to ongoing extradition efforts.

What Happens Next?

With Choksi now in Belgian custody, the extradition process is expected to begin shortly. According to sources, India has provided extensive documentation to support the case, including court-certified copies of chargesheets, financial fraud evidence, and statements from bank officials and whistleblowers.

It is now up to Belgium’s legal system to determine the next course of action. If extradited, Choksi will face criminal trial in India under various laws, including the Indian Penal Code (IPC), Prevention of Corruption Act, and Prevention of Money Laundering Act.

Legal experts believe that Belgium may not oppose the extradition, given the gravity of charges, clear documentation, and international pressure to act against financial fugitives. Moreover, India and Belgium share bilateral treaties and cooperative agreements for criminal matters, which may help expedite the process.

Political Reactions and Broader Implications

Choksi’s arrest has led to intense political debate in India. While the ruling BJP government is portraying it as a major success of its anti-corruption drive, the opposition parties have pointed out that Choksi fled under the current regime, raising questions about initial lapses in surveillance and border control.

Nonetheless, the development reinforces India’s increasing global outreach in pursuing economic fugitives, especially those who exploit loopholes in international laws and multiple citizenships to escape justice.

This case also brings into focus the need for stricter financial controls, international collaboration on asset recovery, and tightening of dual citizenship rules to prevent similar scams in the future.

Conclusion

The arrest of Mehul Choksi in Belgium marks a turning point in India’s legal pursuit of fugitive economic offenders. If successfully extradited, his trial could open up further revelations about the inner workings of the PNB scam, the role of complicit bank officials, and the massive systemic loopholes that allowed one of India's largest bank frauds to occur.

As Indian authorities prepare their final extradition submission, all eyes will be on Belgian courts to determine whether Choksi will finally face the consequences of his alleged actions in an Indian courtroom.

Key Takeaway: Mehul Choksi's arrest sends a strong message about India’s global resolve to bring back fugitives, reclaim looted wealth, and restore trust in the financial system.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.