Centre reaction on Mehul Choksi's arrest: 'Very big achievement'

Choksi was located in Belgium last year when he went there on the grounds of getting medical treatment.

Union minister of state (MoS) for finance Pankaj Chaudhary on Monday termed the arrest of fugitive Mehul Choksi "a very big achievement".

"PM Modi had already said that the ones who have looted the money of the poor will have to return it. Action is being taken against a lot of people in the country. Mehul Choksi has been arrested, it is a very big achievement..." the minister told ANI.

Diamantaire  Choksi was arrested in Belgium following an extradition request by Indian probe agencies for his involvement in the Rs 13,000 crore PNB bank loan "fraud" case, official sources said on Monday.

The action against the second "prime suspect" in this case, after Choksi's nephew diamantaire Nirav Modi, was taken on Saturday based on an extradition request moved by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).

Choksi was located in Belgium last year when he went there on the grounds of getting medical treatment. He had been staying in Antigua since 2018 after leaving India. Sources told PTI that the Interpol Red Notice against him for arrest was "deleted" sometime back and the Indian agencies were pursuing him via the extradition route since then.

At least two open-ended arrest warrants, issued by a special court in Mumbai in 2018 and 2021, have been shared by the Indian agencies with their Belgian counterparts as part of the extradition request, the sources said.

Formal paperwork is being done following the arrest/detention as Choksi may seek bail on health grounds, they said.

Choksi, Modi, their family members and employees, bank officials and others were booked by the CBI and the ED in 2018 for perpetrating the alleged loan fraud at the Brady House branch of the Punjab National Bank (PNB) in Mumbai.

It was alleged that Choksi, his firm Gitanjali Gems and others "committed the offence of cheating against PNB in connivance with certain bank officials by fraudulently getting the LOUs (letters of undertaking) issued and got the FLCs (foreign letter of credit) enhanced without following prescribed procedure and caused a wrongful loss to the bank".

The CBI has filed at least two chargesheets against him in this case while the ED has filed three such prosecution complaints.

Modi, declared a fugitive economic offender, has been lodged in a London jail since he was held by the authorities there in 2019 on the basis of a legal request made by the ED and the CBI in this case. He is contesting extradition to India. According to the investigating agencies, officials at PNB's Brady House branch in Mumbai issued 165 LoUs and 58 FLCs during March-April 2017, against which 311 bills were discounted.

LoUs are a guarantee given by a bank on behalf of its client to a foreign bank. If the client does not repay the foreign bank, the liability falls on the guarantor bank.

The ED has attached or seized assets worth Rs 2,565.90 crore in the case against Choksi and the court has allowed "monetisation" of all these properties.

Meanwhile, Choksi's legal team said they would file an appeal against his arrest. "The major ground for the plea is his ill health and that he is undergoing cancer treatment..." advocate Vijay Aggarwal told ANI.