In a significant development in India’s pursuit of economic offenders, fugitive diamond trader Mehul Choksi, one of the central figures in the infamous ₹13,850 crore Punjab National Bank (PNB) fraud case, has been arrested by Belgian authorities.
This marks a crucial breakthrough for Indian enforcement agencies, who have been seeking his extradition for over six years.
Choksi, a once-prominent businessman and former owner of the Gitanjali Group, was detained in Belgium on April 12, 2025, following a coordinated effort between Indian agencies, including the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
According to officials, the arrest took place at a hospital in Belgium, where Choksi had reportedly been undergoing medical treatment at the time.
This arrest marks another chapter in a financial scandal that rocked the Indian banking sector in early 2018 and continues to resonate today as one of the largest frauds in the country’s banking history.
The Rise and Fall of Mehul Choksi
Mehul Choksi, born in 1959, built his fortune through the diamond and jewellery trade and led the Gitanjali Group — once a household name in India’s jewellery market.
For years, Choksi was viewed as a highly successful entrepreneur in the gem and jewellery industry, commanding both domestic and international business.
However, Choksi’s world came crashing down in 2018 when his name, alongside that of his nephew Nirav Modi, surfaced in connection with the PNB fraud case.
The scandal exposed an elaborate and systematic financial fraud that drained one of India’s largest public sector banks of billions of rupees.
In a move that appeared meticulously planned, Choksi left India in January 2018 — shortly before the scam was publicly exposed.
Initially, he flew to the United States, and later, he shifted to the twin-island Caribbean nation of Antigua and Barbuda, where he had secured citizenship under the country’s Citizenship by Investment Program as early as 2017.
Since his departure, Indian agencies have been making sustained efforts to bring him back to face trial.
Understanding the Punjab National Bank Scam
The PNB fraud was engineered using a loophole in the banking system involving Letters of Undertaking (LoUs). LoUs are essentially bank guarantees that allow customers to borrow short-term credit from international branches of Indian and foreign banks.
Between 2011 and 2018, Choksi and Nirav Modi, along with their associated companies, allegedly secured these LoUs fraudulently from PNB’s Brady House branch in Mumbai.
Shockingly, many of these LoUs were issued without following proper verification or internal auditing procedures and were not even recorded in the bank’s core systems — a critical lapse that allowed the scam to remain hidden for years.
Several bank officials were later found complicit in facilitating these fraudulent transactions, bypassing official documentation in return for bribes and personal favors.
The funds raised through these LoUs were purportedly meant for importing diamonds and other precious stones. However, the majority of the money was diverted for personal enrichment and for keeping the fraudulent operation afloat by repaying older LoUs with new ones — a classic case of a Ponzi-style fraud.
By the time the scam was detected, the scale had ballooned to nearly ₹13,850 crore, with Nirav Modi’s companies accounting for approximately ₹6,498 crore and Mehul Choksi’s Gitanjali Group responsible for around ₹6,097 crore. The remaining sum represented interest liabilities and other associated costs.
The Aftermath: Investigations, Asset Seizures, and Global Manhunt
Following the public revelation of the scam in 2018, the CBI and ED launched a massive crackdown on the individuals and companies involved.
Raids were conducted across various offices and residences linked to the Gitanjali Group and Nirav Modi’s firms. Bank accounts were frozen, valuable assets were seized, and a global lookout was issued for both Modi and Choksi.
The Enforcement Directorate also uncovered evidence that large sums of money were transferred abroad and laundered through a network of shell companies — paper firms set up for the sole purpose of masking the real beneficiaries and creating a complex web to hide illicit financial flows.
In September 2024, the Special Prevention of Money Laundering Act (PMLA) Court in Mumbai authorized the sale of assets belonging to the Gitanjali Group valued at approximately ₹2,565 crore.
The move came after the ED and several defrauded banks, including PNB and ICICI Bank, sought legal approval to auction off the assets in an attempt to recover some of the stolen funds.
Priti Choksi’s Involvement and the Dubai Connection
The investigation also brought Mehul Choksi’s wife, Priti Choksi, under the enforcement agencies’ scanner. Evidence suggested that she played a much more active role than previously assumed. In 2013, in collaboration with CD Shah of Magus Consultancy, Priti Choksi helped set up three offshore entities: Charing Cross Holdings Ltd, Colindale Holdings Ltd, and Hillingdon Holdings Ltd.
These companies were incorporated in offshore tax havens, making ownership trails extremely difficult to trace. Hillingdon Holdings, in particular, became a major point of interest for investigators after Priti Choksi was identified as the “Ultimate Beneficial Owner.”
Hillingdon Holdings went on to become the sole shareholder of Goldhawk DMCC, a company based in Dubai. Through this setup, the Choksis acquired high-value real estate assets in the Almas Tower, one of Dubai’s landmark commercial properties.
The properties, worth over ₹22.5 crore, were purchased using funds believed to be proceeds from the PNB fraud.
Further scrutiny of financial records revealed that in November 2014, an amount of AED 600,000 was transferred from Asian Diamonds and Jewellery FZE — a UAE-based company under the Gitanjali Group — to Hillingdon Holdings, confirming suspicions of money laundering.
Though the Enforcement Directorate seized these Dubai properties in 2019, on paper they still remain listed under an older entity name, Diminico DMCC.
The Road Ahead: Extradition Likely?
Now that Belgian authorities have detained Mehul Choksi, attention has turned to the next critical step: extradition to India. Indian law enforcement is expected to push hard to bring him back to face charges in Indian courts.
Given Choksi’s Antiguan citizenship, legal complexities may arise regarding his status, especially considering the multiple jurisdictions involved.
However, officials are hopeful that international cooperation, especially in light of the severity and global scale of the fraud, will pave the way for his return.
For now, the arrest serves as a major victory for Indian investigators and a reminder that even the most well-connected fugitives can eventually be tracked down.