SFIO files complaint against Choksi in bank fraud case

The Serious Fraud Investigation Office (SFIO) has filed a prosecution complaint against fugitive businessman Mehul Choksi, his wife Priti Choksi, former managing director and chief executive officer (MD-CEO) of ICICI Bank, Chanda Kochhar, the same bank’s former executive director NS Kannan, former Punjab National Bank (PNB) officers and several others as part of a probe into Choksi’s companies that are accused of cheating the banks of over ₹13,000 crore, people familiar with the matter said on Monday.

SFIO, which investigates and prosecutes corporate frauds, has detailed in its complaint, the entire chain of financial irregularities and the role of various accused who allegedly helped Choksi create a fortune before fleeing India in 2017, the people added, asking not to be named.

The complaint, filed before a Mumbai court last month, also named Kochhar (who is being investigated by the Central Bureau of Investigation and the Enforcement Directorate in a separate probe against the Videocon Group), Kannan, former PNB employees Gokulnath Shetty, Bechu Tiwari, Yashwant Joshi and Prafful Sawant, and several key functionaries in Choksi’s companies.

The firms investigated and named by SFIO, include Gitanjali Gems Ltd, Asmi Jewellery India Pvt Ltd, Gili India Limited, Nakshatra Brands Limited, Bezel Jewellery (erstwhile D’damas), as well as several entities based in Hong Kong .

Kochhar declined comment on the matter. Kannan didn’t take calls and did not respond to a text message.

Choksi’s lawyer Vijay Aggarwal cited the Kushal Kumar Aggarwal vs Enforcement Directorate (ED) and said that SFIO’s complaint is not a charge sheet, adding that his “clients cannot be summoned by the court without giving us an opportunity of hearing”. He added: “My clients cannot be termed to be accused of the case. My office will defend them like a rock.”

Arrested on April 11 last year on India’s extradition request, Choksi, 65, is currently lodged in a prison in Antwerp. Extradition proceedings are at an advanced stage and all efforts by Choksi to get relief from Belgian courts have so far failed.

Indian investigators have accused Choksi of defaruding banks to the tune of ₹13,000 crore between 2018 and 2022. These include a fraud worth ₹6,097 crore perpetrated on Punjab National Bank (PNB); a case in which 28 banks led by the ICICI Bank were cheated of ₹5,564 crore by Gitanjali Gems between 2010 and 2018; one in which a consortium of 9 member banks led by PNB were defrauded of ₹807 crore by Choksi and his firm Nakshatra Brands Ltd; and a ₹375 crore fraud on PNB by Gili India Ltd.

SFIO has been probing Choksi and companies since February 2018, a month after the PNB fraud came to light. Choksi and his nephew Nirav Modi had already fled India along with their families by then.

A SFIO officer who asked not to be named said the agency looked into “all aspects including role of bank officers including senior management who helped him (Choksi) avail the credit facilities, actual diamond jewellery business activity of his companies, use of shell companies to divert the funds, and foreign links of the firms and individuals. The findings have been detailed in the prosecution complaint”.

The Mumbai court has set the next hearing of the SFIO complaint on April 9.

Officials said the SFIO charges can also be used against Choksi in the ongoing extradition proceedings before the Belgian courts.

The extradition has been sought under the Indian Penal Code (IPC) sections 120 B (criminal conspiracy), 201 (destruction of evidence), 409 (criminal breach of trust), 420 (cheating), 477A (falsification of accounts), and sections 7 and 13 (bribery) of the Prevention of Corruption Act; which are crimes in Belgium as well under the dual criminality clause of the extradition treaty. The United Nations Convention against Transnational Organized Crime (UNTOC) and United Nations Convention against Corruption (UNCAC) were also invoked in the extradition request.