CBI files three fresh FIRs against Mehul Choksi in Rs 6,700 crore fraud case

The CBI has filed three fresh FIRs against absconding diamantaire Mehul Choksi on a complaint from the Punjab National Bank bringing to light an additional Rs 6,746 crore loss incurred by it and other consortium banks, officials said.

Four years after his dramatic escape and failure of state-run PNB to detect the scam between 2010 and 2018, it filed three complaints with the CBI on March 21, reporting the additional loss caused by Choksi and his firm Gitanjali Gems Ltd, Nakshatra Brands Ltd and Gili India Ltd.

The Punjab National Bank (PNB) and other members of the consortium had extended credit facilities to these companies.

Choksi's counsel Vijay Aggarwal told PTI: "This is a witch hunt. When one FIR has been lodged and a charge sheet has been filed for the total loss to the banks, how can for every small transaction there be a separate FIR now?"

"With that logic, if they claim to be a total Rs 13,000 crore loss they should lodge one FIR each for every single rupee," he said and asked if there is illegal construction of a wall, would you lodge one FIR each for every brick laid.

"That is why prosecution cases fail. Many mountains were made out of mole hills earlier. What has happened, the case is like the dead for years. The case has not moved an inch in the trial court. So the truth will never come out," he said.

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The diamantaire's counsel said there is a vigilance manual circular that the consortium can lodge only one FIR. Each consortium member cannot lodge separate FIRs, he said.

The Central Bureau of Investigation (CBI) filed the cases against Choksi, who is in Antigua and Barbuda after his escape from India in the first week of January 2018, days before the scam allegedly perpetrated by him and Nirav Modi surfaced, the officials said.

Diamond merchant Modi, held in a UK prison, suffered a setback Thursday in his legal battle against his extradition as the high court here denied him permission to appeal against the move in the UK Supreme Court

The first FIR by the CBI pertains to an alleged fraud of Rs 5,564.54 crore between 2010 and 2018 by Choksi, his firm Gitanjali Gems Ltd and its senior executives, on a consortium of 28 banks led by ICICI, they said.

"It appears that in the account of Gitanjali Gems Ltd, fraudulent activities were done by Mehul Choksi in connivance with its director Dhanesh Vrajlal Sheth, joint president finance Kapil Mali Ram Khandelwal, CFO Chandrakant Kanu Karkare and others to enrich themselves illegally and derive unlawful and unjust gains and thereby, causing a loss to member banks of the consortium and in furtherance, thereof, have cheated/defrauded the consortium member banks to the tune of Rs 5564.54 crore," the PNB has alleged.

The bank, in its complaint, now a part of the FIR, has alleged that Choksi and the other accused "were involved in fudging of accounts, siphoning off funds and utilising the sanctioned credit limits not for genuine trade transactions".

The second FIR pertains to alleged cheating to the tune of Rs 807 crore by Choksi, his firm Nakshatra Brands Ltd and others during the period in a consortium of nine banks led by PNB, the officials said.

They said the third FIR pertains to alleged fraud worth Rs 375 crore committed by Choksi and Gili India Ltd in the PNB during the same period.

Choksi took the citizenship of Antigua and Barbuda in 2017, where he has settled since he fled India in 2018.

He and Modi had allegedly pulled off the biggest banking scam of that time by availing loans from foreign banks using letters of undertaking, a kind of bank guarantee, from the PNB.

These guarantees were not allegedly entered into the core banking software of the PNB by its employees who were party to the crime.

The officials said these loans were not repaid, bringing a liability of over Rs 13,000 crore on the PNB in 2018. Since 2018, the CBI has filed at least seven separate FIRs and several charge sheets against Choksi, they said.

He and Modi fled the country days before the PNB approached the CBI with its complaint in January 2018.

In Modi's case, in a judgment order pronounced at the Royal Courts of Justice in London, Lord Justice Jeremy Stuart-Smith and Justice Robert Jay ruled that the appellant's (Modi) application for permission to appeal to the Supreme Court is refused".

Choksi's stay was shaken last year when he was found in neighbouring Dominica under suspicious circumstances.

India had dispatched all possible legal arsenal to bring him back, but Choksi got bail from the local courts, which allowed him to travel back to his sanctuary in Antigua and Barbuda.

The case of illegal entry into Dominica has also been dropped by a court there.