The TLDR: While his nephew and partner-in-scams Nirav Modi rots in a UK jail, Uncle Choksi has sparked a full-on international drama over his extradition to India. Dominica wants to send him to Antigua—which doesn’t want him back. But the Indians really, really do. Meanwhile, Choksi is using every trick in the book—including hopping countries and passports and spinning lurid tales of kidnapping—to stay far away from home. 

Tell me about the drama first!

Ok, let’s work backwards from where we are now. 

The great escape: The former jewellery king fled to Antigua in January 2018—just weeks before he was named as a suspect in a massive bank fraud (which we will get to). He had already secured his Antiguan citizenship in November 2017—just weeks before the Central Bureau of Investigation started investigating the scam. And there he has remained—leading a quiet if somewhat shady life. Point to note: As long as he is an Antiguan citizen, he can’t be extradited to India. 

The attempted extradition: The Antiguan government has been doing its best to get rid of Choksi. Last year, local authorities issued a show cause notice signalling that they plan to revoke his citizenship—a move he is currently fighting in court. The Antiguan Prime Minister Gaston Browne made clear:

“His citizenship was processed; he got through but the reality is his citizenship will be revoked and he will be repatriated to India; so there is recourse. It's not a case that we are trying to provide any safe harbour for criminals, for those who are involved in financial crimes.”

The great abduction? A week ago, Choksi went out for dinner but then disappeared—and resurfaced days later in the neighbouring Caribbean island of Dominica, where he was arrested for illegal entry. He claims to have been abducted:

“Choksi’s counsel in Dominica, Wayne Marsh, claimed that the businessman told him he was abducted by ‘an Indian and Antiguan’ police officer on May 23 while visiting a restaurant for dinner. Choksi claimed that the abductors masked him and put him on a yacht that had a Dominican flag. He was taken to the southern tip of Dominica where he was kept till he was arrested by the local police on May 26.”

Point to note: In the first photo taken since his arrest, Choksi has a big, fat shiner—which his lawyer is offering as proof of his kidnapping: “I noticed that he was severely beaten, his eyes were swollen and had several burnt marks on his body.” See the photo below:

Why this matters: If Choksi broke the law while fleeing Antigua, it offers a strong reason to strip his citizenship. Antiguan PM Browne isn’t buying the story, and told reporters that Choksi took his girlfriend to Dominica “to have dinner or have a good time... and got caught.”

Who wants Mehul-bhai? Dominica says it will send Choksi back to Antigua after checking on his citizenship status. Antigua wants Dominica to send him directly back to India. The Indian government is just fine with that. Meanwhile, Choksi’s lawyers have filed a habeas corpus petition to ensure he is produced in a Dominican court—which will hear the petition on Wednesday. Meanwhile, New Delhi has sent a private jet with court documents to establish his guilt, and perhaps to escort him back?

Whoa, who is this guy??

• 62-year-old Mehul Chinubhai Choksi—nicknamed Pappu—was born into the jewellery business.
• He took over Gitanjali Gems in the 1980s and turned a family dhanda into a gargantuan empire with multiple brands: Maya, Gili, Nakshatra, Asmi, besides Gitanjali Jewels—which boasted brand ambassadors like Priyanka Chopra, Shah Rukh Khan and Katrina Kaif.  
• But his fondness for splashy spending and the big life proved to be expensive. By 2013-2014, the company had a debt of Rs 84.85 billion (Rs 8,485 crores).
• In its 2016-17 annual report, the group called itself “the largest integrated branded jewellery manufacturer-retailer in the world” with an annual turnover of $2.5 billion. But as of March 2017, his company owed Rs 49.93 billion (Rs 4,993.96 crores) to banks—all of which he failed to pay.
• The Reserve Bank of India named Gitanjali Gems as the #1 ‘wilful defaulter’ for 2019-2020—with an unpaid debt of Rs 56.93 billion (Rs 5,693 crores).

Connection to Narendra Modi: Back in 2018—after Choksi’s well-timed exit from the country—there was great speculation about his political connections. This included memes of a clip of Prime Minister Narendra Modi fondly namechecking ‘Mehul Bhai’ at an event in 2015.

Connection to Nirav Modi: Choksi was the other N. Modi’s uncle and mentor—and the reason he is the government’s most wanted man. Both Choksi and Modi fled the country while the CBI was probing wide-scale bank fraud involving bad loans. In 2018, the Enforcement Directorate registered two FIRs accusing Modi and Mehul Mama of defrauding the Punjab National Bank of Rs 135 billion (Rs 13,500 crore). It alleges that Choksi is a partner in three of Modi’s companies—which he denies. Modi fled to the UK, and is now behind bars—also fighting extradition to India. 

Rs 135 billion? How did they manage that? 

The scam involved something called a Letter of Undertaking (LoU). Here’s how it worked:

• In the import/export business, Indian companies who want to make a significant purchase in foreign currency will ask their local bank to issue an LoU for a requested amount to an overseas bank. 
• That overseas bank in turn will release the money for payments. Essentially, the Indian bank’s LoU guarantees a foreign currency loan, and it is liable if the money is not paid back within a certain time period—which is typically 90 days. 
• In this case, the PNB branch in Mumbai issued LoUs on behalf of Modi’s companies for staggering amounts which they never paid back. Instead, the LoUs were extended over and over again. And this went on for seven years. 

An inside job? According to the CBI, the entire scam was carried out by a handful of ‘bad apples’ who managed to bypass the bank’s strict security protocols to issue the LoUs. And even more incredibly, they ensured there was no record of these transactions in the central banking system—which otherwise would have served as an early red flag. There is naturally great scepticism about this theory. Adding to the ‘fishiness’ of it all, PNB didn’t report the fraud until the end of January, 2018—weeks after Modi, Choksi & Co fled the country. 

So what’s next for this guy?

The speediest option would be for India to get a deportation order from Interpol—with the cooperation of Antiguan authorities. But that may be a long shot given the Dominica court’s focus on Choksi’s citizenship rights. OTOH, Antigua is clearly determined to get rid of Choksi—and will eventually revoke his citizenship, however long it takes. But that doesn’t mean Choksi is out of options, as his old buddy Atul Merchant tells Fortune:

“[H]is modus operandi is built on selecting countries which have complex or sketchy extradition treaties with India. What this means is if he is losing case proceedings in one nation, he moves to another country and the Indian laws and proceedings would have to start all over again.

 

The Caribbean islands are best suited for such travel because all it involves is moving from one little island to another and being able to effectively shift new passport status and residence within a matter of hours. ‘The chase is far from over and it’s highly unlikely Choksi will be back anytime soon,’ says Merchant.”

FYI: Choksi’s close aide claims that he has already taken another Carribean citizenship.

The bottomline: Bhaag, bhaag, DK Bose, bhaag. (Here’s a partial explanation for that reference. Sadly, you’ll have to google or ask friends for more)

Reading list

Fortune magazine has a lively read on Choksi’s extradition. Indian Express has the best explanation on how the bank fraud worked, and an older ground report on Choksi’s life in Antigua. MoneyControl and Business Standard have more on Choksi’s corporate career, scandals included. Quartz has a good read on how Nirav Modi built a diamond empire. Choksi also gave an extensive interview to Hindustan Times defending himself.