The Arrest and the Scam

Absconding diamantaire Mehul Choksi has been arrested in Belgium following an extradition request by Indian probe agencies for his involvement in the over Rs 13,000 crore PNB bank loan "fraud" case. 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).

The Timeline of Events

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. A year prior, in 2017, he had acquired Antiguan nationality.

The Mechanics of the Fraud

The Punjab National Bank (PNB) scam is one of the largest financial frauds in India’s banking history. It involved the misuse of banking instruments to siphon off more than Rs 13,000 crore. The scam was led by jeweller Nirav Modi and his uncle Mehul Choksi, both of whom fled India after the case came to light in early 2018.

The Role of PNB Officials

The fraud came to light when PNB, a public sector bank, filed a complaint with the Central Bureau of Investigation (CBI) on January 29, 2018. The complaint said that Nirav Modi and his group of companies had obtained fraudulent LoUs from the Punjab National Bank's Brady House branch in Mumbai.

Investigation and Recovery Efforts

Following the complaint, the CBI registered multiple cases against Nirav Modi, Mehul Choksi, their family members, employees, and PNB officials. The Enforcement Directorate (ED) also filed money laundering cases under the Prevention of Money Laundering Act (PMLA).