Cornering Choksi

THE arrest of fugitive diamond tycoon Mehul Choksi in Belgium has made India hopeful that he will finally be brought back and put on trial in a case that had rocked the country’s banking sector in 2018. He is accused of defrauding the Punjab National Bank of over Rs 13,000 crore, allegedly in connivance with bank officials and others. Both Choksi and his nephew, co-accused Nirav Modi, had managed to flee India before details of the colossal fraud became public. Nirav was arrested in Britain in 2019 and remains in custody there, but he has been able to stall his extradition so far on one pretext or the other. A similarly protracted legal battle awaits the Indian authorities in Choksi’s case.

It’s inevitable that he will leave no stone unturned on the legal front to secure his release and ensure that his extradition gets delayed or does not happen at all. The defence counsel’s playbook is not going to hold any surprises, with the all-too-familiar grounds being ill health — Choksi is undergoing treatment for cancer — and the allegedly poor conditions in Indian prisons. Indian probe agencies must be well prepared to counter such arguments in a convincing manner. At stake is the investigation into one of India’s biggest bank frauds, besides the efficacy of the Fugitive Economic Offenders Act, which was enacted by the Narendra Modi government in 2018 after Choksi and Nirav made their great escape.

Unfortunately, the Enforcement Directorate’s plea seeking to declare Choksi a “fugitive economic offender” and confiscate his assets under provisions of the Act has been pending before a Mumbai court for nearly seven years. The proceedings should be expedited to up the ante against Choksi. The Indian government has claimed that the amount involved in bank frauds has dropped appreciably in the past few years, thanks to steps such as the setting up of an online Central Fraud Registry. This is a welcome development, but catching the big fish is no less important for strengthening deterrence and reassuring depositors.

Editorials