SFIO Files ₹13,000 Crore Fraud Case Against Fugitive Jeweler and Top Bank Executives
India's Serious Fraud Investigation Office has filed a comprehensive prosecution complaint in a Mumbai court alleging fraud exceeding ₹13,000 crore by companies linked to fugitive jeweler Mehul Choksi, who fled India in 2017. The complaint also names former ICICI Bank managing director and chief executive Chanda Kochhar, several senior bankers, and corporate entities in what represents one of India's largest banking fraud investigations.
The filing, submitted last month, traces how credit facilities were allegedly obtained through deceptive means and subsequently routed through multiple accounts and shell entities before being moved out of the financial system. The case highlights systemic vulnerabilities in India's banking sector and raises questions about oversight mechanisms that allowed the alleged fraud to continue undetected for years.
Background and Context
The investigation centers on a sophisticated network of companies allegedly used to divert funds through over-invoicing and circular transactions. According to investigators, the scheme involved obtaining credit facilities from multiple banks under false pretenses, then siphoning these funds through a complex web of domestic and international entities. The alleged fraud spanned several years before coming to light in 2017, when Choksi left India shortly before investigations intensified.
Banking fraud represents a significant challenge to India's financial stability, with the Reserve Bank of India implementing progressively stricter reporting requirements and oversight mechanisms in recent years. This case emerges as a test of India's enforcement capabilities and international cooperation in recovering allegedly misappropriated funds and holding responsible parties accountable across jurisdictions.
Key Figures and Entities
The prosecution complaint names Mehul Choksi and his wife Priti Choksi as primary accused, alongside former ICICI Bank MD-CEO Chanda Kochhar and former executive director N.S. Kannan. From Punjab National Bank, the complaint identifies Gokulnath Shetty, Bechu Tiwari, Yashwant Joshi, and Prafful Sawant as allegedly complicit in facilitating the fraudulent transactions.
Corporate entities named in the complaint include Gitanjali Gems Ltd, Asmi Jewellery India Pvt Ltd, Gili India Ltd, Nakshatra Brands Ltd, and Bezel Jewellery (formerly D'damas), along with multiple Hong Kong-based operations. Investigators allege these companies served as conduits for fund diversion rather than legitimate business operations, with financial records indicating patterns inconsistent with normal commercial activity.
According to court filings, Choksi's counsel Vijay Aggarwal has challenged the prosecution complaint, arguing that it "is not a charge sheet" and that his clients cannot be termed accused without first being given an opportunity to be heard. Kochhar declined to comment on the allegations when approached by journalists, while Kannan did not respond to requests for statement.
Legal and Financial Mechanisms
The investigation uncovered a multi-layered operation involving alleged over-invoicing of imports and exports, creation of fictitious transactions, and circular movement of funds through shell entities to obscure their origin. According to the complaint, funds were allegedly moved through multiple layers of companies before being transferred overseas, making them difficult to trace and recover.
The total alleged fraud amounts to ₹13,043 crore distributed across several banking relationships: ₹6,097 crore involving Punjab National Bank, ₹5,564 crore allegedly cheated from a 28-bank consortium led by ICICI Bank, ₹807 crore from a PNB-led consortium of nine banks, and ₹375 crore linked specifically to Gili India Ltd.
India's extradition request for Choksi cites multiple sections of the Indian Penal Code including 120B (criminal conspiracy), 201, 409, 420, and 477A, along with provisions of the Prevention of Corruption Act. The request also invokes international legal instruments including the UN Convention against Transnational Organized Crime and the UN Convention against Corruption to establish dual criminality under Belgian law.
International Implications and Policy Response
Choksi's current detention in a Belgian prison following his arrest on April 11 last year highlights the cross-border dimensions of financial crime and the challenges of securing extradition. According to officials, his attempts to obtain relief from Belgian courts have been unsuccessful thus far, with extradition proceedings reportedly at an advanced stage.
The case demonstrates how allegedly fraudulent operations exploit jurisdictional boundaries to hinder investigations and asset recovery. It has prompted discussions within Indian regulatory circles about strengthening international cooperation mechanisms and improving information sharing between banks and enforcement agencies to detect suspicious patterns earlier.
The Mumbai court has scheduled the next hearing for April 9, where the SFIO prosecution complaint will be considered. The outcome could significantly impact India's approach to handling complex financial crime cases and its extradition proceedings for economic offenders who have fled the country.
Sources
This report draws on information from the Serious Fraud Investigation Office prosecution complaint, court filings from Mumbai and Belgian courts, official statements from banking institutions, and independent journalism reporting on financial crime investigations in India between 2017 and 2024.
