PNB fraud case: Did not clear Mehul Choksi’s Antigua citizenship request, clarifies SEBI

Choksi and his nephew Nirav Modi are wanted in the Rs 13,578-crore Punjab National Bank fraud case, which is now being probed by the Central Bureau of Investigation and the Enforcement Directorate. 

By: Express Web Desk | New Delhi | Updated: August 3, 2018 9:02:19 pm
Mehul Choksi left India on January 7. Mehul Choksi left India on January 7.

The Securities and Exchange Board of India (SEBI) on Friday dismissed reports that said the markets regulator had provided “positive report” on fugitive businessman Mehul Choksi to the Citizenship by Investment Unit (CIU) of Antigua, based on which he was granted citizenship in their country.

“SEBI has neither received any request from the Citizenship by Investment Unit (CIU) of Antigua for updates on any investigation nor provided any such information to CIU,” the markets regulator said in a statement.

The clarification from SEBI came in the wake of a report by a local media in the Carribean nation that said according to Antiguan authorities, Choksi was granted citizenship after the markets regulator along with the Ministry of External Affairs had submitted a “positive report” to CIU.

Antigua claimed it was told by the Indian agencies that there was no adverse information against Choksi when it did a background check before granting him citizenship in 2017, local newspaper the Daily Observer reported.

Read | Fugitive jeweller Mehul Choksi says he took Antigua citizenship last year to expand business

Choksi and his nephew Nirav Modi are wanted in the Rs 13,578-crore Punjab National Bank fraud case, which is now being probed by the Central Bureau of Investigation and the Enforcement Directorate.

Choksi’s application for citizenship in Antigua in May 2017 was accompanied with clearance from the local police as required by norms, the report said, citing a statement from CIU of Antigua and Barbuda.

“The said police clearance certificate from the Government of India, Ministry of External Affairs Regional Passport Office, Mumbai, certified that there was no adverse information against Mr Mehul Chinubbhai Choksi which would render him ineligible for grant of travel facilities, including visa for Antigua and Barbuda,” the report said.

Read | Nirav Modi, Choksi summoned by court under new fugitive offender law

The Antiguan authorities conducted a thorough check on Choksi from open source global agencies, including the Interpol, that there was “no instance” of any derogatory information against him, the newspaper said.

The Antiguan authorities, as part of their own checks, found two instances of Sebi action against Choksi’s firms in 2014 and 2017 and sought more information on them, the report further said. It further quoted CIU as claiming that Sebi had told authorities in Antigua that one case was “satisfactorily closed” and there was “insufficient evidence” to pursue the second matter.

However, denying the claims, Sebi said it had neither received any request by CIU for updates on any investigation nor did it provide the same to them.

Read | Revoking Mehul Choksi citizenship: Antigua has reservations

“This is with reference to a news item published in a section of media headlined “MEA, SEBI provided positive report on Mehul Choksi in 2017, says Antigua’s CIU”. The news item, inter-alia, states that “According to the Antiguan authorities, even SEBI provided a positive report when asked about Mehul Choksi. The CIU received documentation of two instances in which the Securities and Exchange Board of India (SEBI), in 2014 and 2017, opened investigations on a corporate entity owned by Choksi. We requested updates on the status of the investigations and received documentary confirmation, issued by the SEBI stating that in one case, the matter had been satisfactorily closed, and indicating in the other that there is not sufficient evidence to pursue the matter further,” SEBI said.

As per the Antiguan media report, the CIU has said if there was a warrant against Choksi when his application of citizenship was being processed, Interpol should have been informed about it and it should have been part of national criminal database.

Read | Fugitive jeweller Mehul Choksi on the move again, probe agencies say he has left Antigua

Choksi had applied for Antiguan citizenship in November 2017 and took the oath of citizenship on January 15, 2018. He had left India on January 7. His companies had approached Punjab National Bank (PNB) for fresh letters of undertaking (LoUs) to be issued on January 16. When PNB found that earlier LoUs had been fraudulently issued and the companies had massive outstanding loans, it approached the CBI.

Meanwhile, Antigua and Barbuda had expressed their reservations over India’s request to revoke the citizenship of Choksi whose extradition has been sought by the Indian government, officials said. At a meeting with representatives of the Indian High Commission, Antigua and Barbuda officials reportedly said that they couldn’t annul Choksi’s citizenship as that would violate their constitution. They claimed he got citizenship only after his credentials were “verified.” However, they assured Indian officials that they might consider New Delhi’s extradition request once a Red Corner Notice (RCN) is issued against him.

Read | Fugitive Economic Offenders Bill passed to stop big fish escape after fraud

Congress-BJP trade barbs

Upping the ante against the Narendra Modi-led government, Congress alleged that the “shocking details” emerging from Antigua have only “exposed the complicity and connivance” of the Centre. “Loot and make them scoot is the prime policy of the Modi government. The shocking details reveal how the Modi government enacted this mega scam,” Congress spokesperson Randeep Singh Surjewala said in a statement.

Questioning PM Modi as to why he did not raise the issue when he met his Antiguan counterpart Gaston Browne in April 2018, Surjewala said, “Why did not Prime Minister Narendra Modi raise the issue of citizenship during his meeting with Antigua PM Gaston Browne in April, 2018?”

“Why did the CBI/ED not move the Interpol for a warrant against Mehul Choksi or provide the requisite evidence of criminal fraud against him? Is it not correct that this deliberate failure on part of CBI/ED in providing evidence to Interpol, led to Interpol giving a clean chit to Choksi?” he added.

The BJP, on the other hand, alleged that it was during the Congress rule that Choksi’s assets increased. “Choksi and others who had escaped the country are close to Congress leaders. During 2012-13, their assets increased and their business flourished. Congress should stop blaming us and answer about the revelation that Choksi’s lawyer made two days back,” Anil Baluni, BJP media-in-charge, said.

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