The fugitive businessman and diamond merchant Mehul Choksi was arrested on Saturday by the Belgian authorities on India’s extradition request.

Choksi was a key accused in the Rs 14,000 crore Punjab National Bank Fraud case. His arrest was based on two non-bailable warrants that have been issued by a Mumbai court, dated May 23 2018, and June 15 2021.

Choksi’s defence team is preparing for a legal fight, seeking bail for him and challenging the extradition efforts. His lawyers argue that there are valid grounds to oppose extradition, including his medical condition.

What is Punjab National Bank Scam?

The PNB scam, or Punjab National Bank scam, was a major financial fraud that came to light in 2018. It involved a jeweller and designer Nirav Modi, along with his uncle Mehul Choksi, who managed to fraudulently obtain loans worth over Rs 14,000 crore from Punjab National Bank, one of India’s largest government-owned banks. They did this by working with a few dishonest bank employees who issued fake Letters of Undertaking (LoUs) – these are official bank guarantees that allowed them to borrow money from overseas banks without proper checks or collateral.

The scam went unnoticed for several years because the fake guarantees were not recorded in the bank’s official systems. When the fraud was finally discovered, it caused a massive uproar, led to major losses for the bank, and sparked a wider debate on corruption and poor regulation in India’s banking sector.

Choksi’s Arrest

Reacting to the news of Choksi’s arrest, the PNB scam whistle-blower Hariprasad SV said, “It’s really great news. We are very glad for all those people who were cheated by Mehul Chowksi in India. It’s unbelievable how he got caught in Belgium. It’s also important that we not only get him back to India but also get back the money he looted, that is what India needs.”

“Extradition is not going to be an easy task. His wallet is full, and he will employ the best advocates in Europe, as Vijay Mallya has been doing. It is not easy for India to get him back… Even though he was caught in Antigua, he managed to get out of it as he had a fleet of lawyers. It’s not going to be so easy for the government of India, but I hope the government succeeds this time,” he added.

Choksi left India on January 2, 2018, initially travelling to the United States before settling in Antigua. He had acquired Antiguan citizenship in 2017, prior to fleeing the country.

In 2021, Choksi was arrested in Dominica under controversial circumstances. While authorities alleged he was trying to flee to Cuba, his legal team claimed he was kidnapped from Antigua. Despite India seeking his extradition, Dominica deported him back to Antigua.

Choksi later travelled to Belgium, reportedly to receive cancer treatment, where he has now been detained.