Explained: What are the criminal charges that Mehul Choksi is facing in India?

Choksi is facing criminal proceedings by both CBI and ED. The CBI had first named Choksi and his firms including Gitanjali Gems along with others in 2018 based on a complaint received by Punjab National Bank for alleged issuance of fraudulent Letters of Undertaking in their favour causing losses to the bank

Fugitive diamond trader Mehul Choksi has been arrested in Dominica after he was reported missing early this week from his home in Antigua and Barbuda, the Caribbean nation of which he has been a citizen since early 2018.

A look at the criminal charges Choksi is facing in India.

What are the cases in which Mehul Choksi has been booked?

Choksi is facing criminal proceedings by both CBI and Enforcement Directorate (ED). The CBI had first named Choksi and his firms including Gitanjali Gems along with others in 2018 based on a complaint received by Punjab National Bank (PNB) for alleged issuance of fraudulent Letters of Undertaking in their favour causing losses to the bank. The ED also subsequently filed a complaint alleging that Choksi and others were involved in money-laundering the proceeds of crime in overseas accounts. Choksi has been booked under the Prevention of Money Laundering Act and other sections pertaining to cheating, criminal conspiracy of the Indian Penal Code and relevant sections of the Prevention of Corruption Act. A similar case was also filed against Choksi’s nephew Nirav Modi alleging that they both colluded with some staffers of PNB to perpetrate the multi-crore fraud.

What is the status of the criminal cases in India against Choksi?

Choksi had left the country on January 7, 2018, days before the PNB scam came to light. He is learnt to have applied for citizenship in November 2017 under the island nation’s Citizenship by Investment programme and took oath of citizenship in January 2018. After the two central agencies began the probe in the case, Choksi was summoned multiple times for questioning. After he remained unavailable, a special court in March 2018 issued a non-bailable warrant against him.

In May 2018, the CBI filed a chargesheet against Choksi and others detailing his role in the case. Choksi continued to evade the probe despite the non-bailable warrants. In June 2018, he sought cancellation of the warrants on various grounds. These included his medical condition stating that he has blocked arteries, diabetes and a clot in his brain since 2012. His pleas said that these have made it extremely impossible for him to travel on long flights of 41 hours. Another reason he had given for not returning to India in 2018 was by citing ‘the recent trend of mob lynching’ and has said there is a threat to his life, showing willingness to face interrogators on video-conference.

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While the agencies arrested other accomplices including staffers of PNB — some of whom remain in custody — Choksi was not arrested. The ED even filed an application in July 2018 seeking to declare Choksi as a ‘fugitive economic offender’ under the then new ordinance. The Fugitive Economic Offenders Act gives the central government powers to proceed with confiscating of properties belonging to a person declared as a fugitive economic offender by a court even before the trial against them begins. The ED had given the special court a list of properties belonging to Choksi.

What is the status of the plea seeking to declare Choksi an FEO?

While a special court had declared Choksi’s nephew Nirav Modi a ‘fugitive economic offender’ in December 2019, the proceedings on a similar plea against Choksi has been stayed by the Bombay High Court. Choksi’s lawyers had approached the High Court alleging procedural flaws in the ED affidavit filed before the special court. He also sought to cross-examine witnesses while hearing the plea. The special court had rejected the applications. Choksi’s lawyers said that till the ED files its replies on other pending applications, the final order cannot be passed. The High Court in January last year directed the special court to not pass a final order pending the hearing before it. With the pandemic affecting functioning of courts soon after, the application has not come up for hearing since. While Choksi remains absconding, the trial has also not begun against other accused, some of whom remain in custody. The court is yet to frame charges. The process has also been delayed due to the pandemic.

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