CBI opens a new investigation against Mehul Choksi

2 May, 2022 | Riya Girdhar

The runaway billionaire is currently residing in Antigua and Barbuda, where he fled after the Punjab National Bank (PNB) scandal of Rs 13,578 crore was exposed in 2018.

The CBI has filed a new case against fugitive diamantaire Mehul Choksi, his company Gitanjali Gems Ltd (GGL), and others for allegedly defrauding IFCI Ltd, a government of India agency, out of Rs 22.6 crore between 2014 and 2018.

Choksi approached IFCI Ltd seeking financial help for its long-term working capital demand, according to the CBI’s first information report (FIR) filed on Saturday, and encouraged the financial institution to issue a corporate loan of Rs 25 crore in March 2016.

According to the FIR, the IFCI Ltd relied on GGL’s and Choksi’s representations, guarantees, and undertakings, as well as the value of the pledged gems as determined by valuers Surajrml Lallu Bhai and Company, Narendra Jhaveri, Pradip Shah, and Shrenik Shah. The loan was allegedly disbursed on the basis of a two-fold security cover based on the promise of shares and the pledge of gold, diamond, and gold studded jewellery, all of which were valued by the listed valuers. They’ve all been labelled as suspects.

Choksi’s company failed on loan instalments, according to the CBI, and IFCI Ltd used the pledge to recover the money. However, out of the total 20,60,054 promised shares, it could only sell 6,48822 shares worth 4.007 crore because Choksi’s client ID was suspended by National Securities Depository Ltd.

IFCI appointed two valuers to complete a new rating of the pledged jewels in order to realise the security (gold, diamonds and gold studded jewellery). The pledged gems’ value had dropped by 98 percent in three years, according to the new estimate.

“It was also discovered that the diamonds were low-quality laboratory generated chemical vapour diamonds and other inferior colour stones, not real gemstones,” the CBI stated in the FIR.

According to the CBI, Choksi and his company caused a loss of Rs 22.06 crore to IFCI Ltd.

The accused billionaire is currently hiding in Antigua and Barbuda, where he fled after the Punjab National Bank (PNB) scam involving a total of Rs 13,578 crore was exposed in 2018. He is accused of defrauding PNB in the amount of Rs 6,097 crore. Another inquiry into his company Asmi Jewellery’s 942-crore fraud is also underway.

Choksi was discovered in Dominica, a small Caribbean island, in May, where the Indian authorities attempted to deport him rather than go through the lengthy process of extradition from Antigua, where he is a citizen.