Sebi rejects Antigua’s Choksi claim

Caribbean nation asserts citizenship given to fugitive after NOC from MEA, market regulator

Antigua has claimed that the Ministry of External Affairs and the Securities and Exchange Board of India (Sebi) gave a positive report on fugitive businessman Mehul Choksi, wanted in India for the Rs 13,500 crore Punjab National Bank (PNB) scam, based on which he was granted citizenship of that country in 2017 under Section 5(2)(b) of the Antigua and Barbuda Citizenship by Investment Act 2013.

However, the Sebi on Friday rubbished the Antigua’s claims asserting it neither received any request nor did it provide any information to the Citizenship by Investment Unit (CIU) of Antigua. “The 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 stock exchange market regulator said.

In a related development, the Ministry of Home Affairs has forwarded the CBI’s request to the Ministry of External Affairs (MEA) for Choksi’s extradition.

In a detailed statement, Antigua has also said Choksi’s application, along with clearance from the Government of India, was subjected to a stringent background check which included third party verification, internet check and Thomson Reuters world-check.

“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 Choksi which would render him ineligible for grant of travel facilities including visa for Antigua and Barbuda,” the Antigua report 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.

As per the Antiguan media reports, 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.  Under the Citizenship by Investment Programme of Antigua & Barbuda, a person can take their passport on a minimum investment of $100,000 in the NDF investment fund.

Choksi and his companies allegedly availed credit from overseas branches of Indian banks using the fraudulent guarantees of Punjab National Bank (PNB) given through letters of undertaking (LoUs) and letters of credit issued by the Brady House branch which were not repaid, bringing liability on the state-run bank, the officials have said.

An LoU is a guarantee given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.

Choksi fled India on January 4 this year and took oath of allegiance in Antigua on January 15. His citizenship was cleared in November 2017. On January 16, this year, the $2 billion scam was detected by Brady House branch of the PNB, making it the biggest banking scam in the country. 

Meanwhile, the Congress alleged that “shocking details” emerging from Antigua have “exposed the complicity and connivance” of the Modi Government in the escape of fugitive billionaire Choksi to the Caribbean country.  Congress chief spokesperson Randeep Surjewala was reacting to media reports quoting Antiguan authorities as saying that Indian agencies had no adverse information against Choksi when the Caribbean country conducted a background check on the PNB scam accused before granting him citizenship in 2017.

“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,” he said in a statement.

Hitting back at the Congress over its allegation of the Government’s complicity in the escape of Choksi, the BJP claimed that it is the Modi-led Government which exposed the alleged crimes of fugitive businessmen Choksi and Nirav Modi which they committed during the tenure of the UPA Government. BJP spokesperson Anil Baluni said the fugitive’s lawyer had also claimed in a statement that he had links with “big leaders” of the Opposition party.

“The Congress is levelling baseless allegations against the BJP to deflect the charge it is facing over its senior leaders’ links with him. The people, however, are convinced that we exposed Choksi’s crimes he committed during the UPA Government,” he claimed.