The Interpol has issued Red Corner Notice against absconding billionaire Mehul Choksi, close relative of Indian celebrity jeweller Nirav Modi. The duo have been accused of cheating country’s state run lender, Punjab National Bank (PNB) to the tune of Rs 130 billion.
Choksi moved out of the country earlier this year after he and his firms allegedly cheated the lender of Rs 70 bn. He has taken citizenship of Antigua and had appealed against India’s federal investigation agency’s (CBI) petition seeking Red Corner Notice against him.
“The Interpol has issued a Red Corner Notice against Mehul Choksi on the request of the CBI,” Central Bureau of Investigation’s (CBI) spokesperson Abhishek Dayal said on Thursday (13).
According to the media reports Choski has alleged that the cases registered against him were a result of political conspiracy. The matter of Choski moved to five member Interpol committee’s court, known as Commission for Control of Files which cleared the RCN, according to the media reports.
Nirav Modi and Choksi allegedly cheated the PNB by fraudulently issued Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs). CBI has chargesheeted both Nirav Modi and Choksi separately in the scam.
As alleged in the CBI chargesheet, Choksi cheated Rs 70.8bn, making it the India’s biggest banking fraud case at over Rs 130bn. Nirav Modi allegedly siphoned Rs 60bn. An additional loan default of over Rs 50bn to Choksi’s firms is also a case under CBI probe.
According to the allegations made so far, Nirav Modi and Choksi through their firms obtained credit from foreign branches of Indian banks using guarantees given through fraudulent LoUs and other documents of credit which were not repaid bringing liability on PNB.
The orders for transferring the money were allegedly issued by a bank staff, Gokulnath Shetty using an international messaging system for banking process known as SWIFT platform and without registering their subsequent entries in the PNB’s internal system, thus bypassing scrutiny in the bank, officials said.
An LoU is a guarantee provided by an issuing lender to Indian banks having branches in foreign countries to grant short-term credit to the applicant.