Mehul Choksi, Indian diamond merchant, arrested over US$1.8B bank fraud case

Antigua and Barbuda businessman Mehul Choksi is taken in a wheelchair to the magistrate's court by police after his arrest for illegal entry into the country, in Roseau, Dominica, Friday, June 4, 2021. Choksi is wanted in his native India on a string of charges that include corruption, money laundering and criminal conspiracy. (AP Photo/Clyde Jno Baptiste)

Indian diamond merchant Mehul Choksi has been arrested in Belgium, his lawyer said Monday, in connection with a case of alleged bank fraud.

Choksi and his nephew Nirav Modi fled India in 2018 and are being accused of playing a central role in a US$1.8-billion fraud involving Punjab National Bank (PNB), the country’s second-largest public lender.

The case is one of several bank scandals that sparked public outrage in the world’s fastest-growing major economy.

“My client was taken into custody on Saturday and at the moment he is in prison,” Vijay Aggarwal told reporters on Monday, adding that they would file an appeal for release on grounds that Choksi was not a flight risk and was in ill health.

The arrest was made following an extradition request by India based on two non-bailable warrants that were issued by a Mumbai court in 2018 and 2021, according to local media.

Aggarwal, when asked about the request, said they would argue that it was a “political” case and mount a defence on grounds that Indian prisons have inhumane conditions.

His nephew Modi was dubbed a jeweller to the stars thanks to celebrity customers in Hollywood and India’s Hindi-language movie industry Bollywood.

Indian authorities have seized assets of Modi worth around $90 million including his jewellery business, overseas bank accounts, a London property worth around $7.8 million and two others in New York valued at $29 million.

In 2022, Modi, who is currently in custody in the United Kingdom, lost an appeal against extradition to India.