ED to Monetise ₹2,565.90 Crore Worth of Properties in Mehul Choksi PNB Fraud Case | File Photo
Mumbai: Based on an order issued by the Special Court (PMLA) in Mumbai, the Enforcement Directorate (ED) will now monetise properties worth Rs 2,565.90 crore that were attached or seized in connection with the Mehul Choksi-led Punjab National Bank (PNB) alleged fraud case, agency officials said on Tuesday. This significant step aims to assist financial institutions, including PNB and ICICI Bank, in recovering funds and utilising the assets productively.
The court’s decision came after an application from the victim banks, Punjab National Bank and ICICI Bank, supported by the ED to reinforce the plea. As a result, the transfer of assets has commenced, including properties worth over Rs 125 crore, such as high-value flats located in Mumbai and two factory and godowns premises situated in the SEEPZ , Andheri (East), now handed over to the liquidator of Choksi’s Gitanjali Gems Ltd. The restitution of additional properties is ongoing, according to ED officials
Investigations under the Prevention of Money Laundering Act (PMLA) revealed that between 2014 and 2017, Mehul Choksi, in collusion with associates and PNB officials, fraudulently obtained Letters of Undertaking (LoUs) and Foreign Letters of Credit. This scam resulted in a massive loss of Rs 6097.63 crore to PNB. In addition to the PNB fraud, Choksi defaulted on loans taken from ICICI Bank.
As part of its probe, the ED conducted searches at over 136 locations across India, leading to the seizure of valuables and jewellery worth Rs 597.75 crore linked to Choksi’s Gitanjali Group. Immovable and movable assets valued at Rs 1968.15 crore, including properties in India and abroad, vehicles, bank accounts, factories, company shares, and jewellery, were also attached.
Mehul Choksi, along with his nephew Nirav Modi, has been implicated in a massive Rs 14,000 crore fraud at Punjab National Bank (PNB), facing charges of cheating, corruption, and money laundering. The Enforcement Directorate (ED) filed a charge sheet accusing Choksi of running an organized racket to defraud customers and lenders in India, Dubai, and the US. Nirav Modi, a co-accused, was arrested in London in 2019 and is undergoing extradition proceedings.
Choksi obtained citizenship in Antigua and Barbuda in 2017 via an investment program, allowing him to avoid arrest and extradition. In 2018, the Enforcement Directorate issued a non-bailable warrant against him, along with other co-accused, for their roles in the massive PNB fraud
Choksi, in a special court hearing, claimed he could not return to India due to circumstances beyond his control. He denied fleeing to avoid prosecution, asserting that his passport was revoked by Indian authorities, preventing his return to face the charges. His case is complex, as he remains entangled in various legal battles regarding extradition. While Antigua has provided him some protection, Choksi’s legal team continues to fight his extradition based on claims that he would not receive a fair trial in India. As of the latest reports, his status is still that of a fugitive, living in Antigua under ongoing legal scrutiny.
To expedite the process of recovering funds for the victim banks, the ED and banks adopted a proactive approach. They jointly moved a consent application to the Hon’ble Special PMLA Court for the monetisation of attached properties. In its order dated September 10, 2024, the court directed the ED to facilitate valuation and auction of the assets in coordination with liquidators of Gitanjali Group companies. The proceeds from these auctions will be used to carry out the valuation and auction of the attached or seized properties. After the auction of the said properties, the sale proceeds will be deposited in the PNB/ICICI Bank as fixed deposits.
As part of the restitution process, six properties, including flats situated at Kheni Tower, Santacruz East, Mumbai, with a collective worth of approximately Rs 27 crore, have been restored. Additionally, two significant properties in SEEPZ, comprising land and buildings, valued at Rs. 98.03 crore, have been handed over to the Liquidator of M/s Gitanjali Gems Ltd. The remaining assets are being transferred to the Liquidator and banks, as per the order of the Hon’ble Special Court (PMLA).
