Fugitive Mehul Choksi swindled Punjab and Sind bank of Rs 441 million

Indian born fugitive businessman, Mehul Choksi cheated Punjab and Sind Bank of Rs 441 million, the public sector bank disclosed on Saturday.

This is the first occasion that the 111 year old bank has let out such piece of information on the default committed by Mehul Choksi, who has now become domiciled in Antigua and Barbados.

The New Delhi based PSB has furnished notices declaring Choksi as a willful defaulter who owes the bank the amount for which it has started recovery proceedings against him.

As per the PSB, Choksi’s company, Gitanjali Gems Ltd, had availed the loan from the bank. Mehul Choksi is a director plus a guarantor in the company and legal heir to Guniyal Choksi in the loan account.

However, since they couldn’t clear the loan amount, the PSB declared it as a non performing asset (NPA) on 31st March 2018. the bank has now asked that Choksi pay back the loan plus interest and other costs with effect from 23rd October 2018 onwards.

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After he didn’t agree, the PSB on 17th September declared him as a wishful defaulter. The latest development makes PSB the third prominent government owned bank to disclose its exposure after Oriental Bank of Commerce came clean of loan defaults by Mehul Choksi and Nirav Modi adding upto Rs 289 crore.

The duo came under the scanner in February 2018 after the Punjab National Bank disclosed a immense fraud committed by them to over Rs 13,500 crore, sending shudders in the country’s banking industry.

"Besides PSB, which has been a perpetually loss-making entity, several other banks have exposure to Choksi-Modi and their group companies. Why can't all the government banks come clean and jointly take legal action to recover their dues," former and Trade Unions Joint Action Committee (TUJAC), Maharashtra Convenor Vishwas Utagi told IANS.

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Mr Utagi stated the other bigger questions are: what action has been taken against the departments and officers dealing in foreign exchange in Reserve Bank of India and other affected banks, how much of the outstandings from (Nirav Modi-Choksi and others) accused have been recovered so far and whether the details emerging now are under pressure' before the upcoming merger of banks.

He has ordered a forensic audit into all the accounts in all Indian banks held by the realty, gems and jewellery section on priority to disclose the degree of defaults and the collateral damage to society in the public interest.