PNB fraud case: ED begins process for restitution of properties worth Rs 125 crore to victim banks

The agency on Tuesday said that in order to put the productive assets to use and to enable financial institutes to monetise the assets attached or seized (by ED), a concerted effort was put by ED in collaboration with PNB and ICICI Bank (victims of the bank fraud) and an application for restitution of assets was filed in the Mehul Choksi case.

Based on the application filed by the banks (supported by ED), the Special PMLA Court, Mumbai allowed “monetisation of properties” amounting to Rs 2565.90 Crore attached or seized by the ED.

The court ordered that ED would facilitate the banks and liquidators in different companies under Gitanjali Group to carry out valuation and auction of the attached or seized properties and after auction of the said properties, the sale proceeds would be deposited in the PNB/ICICI Bank as Fixed Deposits.

In pursuance to the order, the process of handing over of assets has been initiated and properties worth more than Rs 125 crore have been handed over to the Liquidator of M/s Gitanjali Gems Ltd. The seized properties include flats situated in Mumbai and two factories/ godowns situated in SEEPZ Mumbai, ED has stated in a statement. Restitution of the remaining properties is also in progress.

Investigation under PMLA in the case of Mehul Choksi revealed that he connived with his associates and bank officials of Punjab National Bank (PNB) during a period from 2014 to 2017 and fraudulently was issued Letters of Undertaking and Foreign Letters of Credit from PNB, resulting in wrongful loss of Rs 6097.63 Crore to PNB. He had also taken a loan from ICICI Bank and had defaulted on that loan as well.

During the investigation, ED conducted searches at more than 136 locations all over India and seized valuables/jewelleries worth Rs 597.75 crore pertaining to the Gitanjali Group.

Immovable/movable assets worth Rs 1968.15 Crore of Mehul Choksi/Gitanjali Group were attached which included immovable properties in India and overseas, vehicles, bank accounts, factory, shares of listed companies, jewellery, among others, the ED said. In aggregate, assets worth Rs 2565.90 Crore were attached or seized in this case and three prosecution complaints have been filed, the agency stated.

Mehul Choksi, along with his nephew Nirav Modi, was implicated in a massive Rs 14,000 crore fraud at Punjab National Bank (PNB), facing charges of cheating, corruption, and money laundering. The ED has accused Choksi of running an organized racket to defraud customers and lenders in India, Dubai, and the US. Nirav Modi, a co-accused, was arrested in London in 2019 and is undergoing extradition proceedings.

Choksi, who is the main accused in the PNB case, is currently facing proceedings under the Fugitive Economic Offenders (FEO) Act, which gives the central government powers to confiscate properties even before the trial begins.
The multi-crore fraud was allegedly perpetrated by billionaire jeweller Nirav Modi and his uncle Mehul Choksi, the promoter of Gitanjali Gems. As of the latest reports, Choksi’s status is still that of a fugitive, living in Antigua.