ED starts sale of properties of Mehul Choksi to recover Rs.6097 Crore of Punjab National Bank

The Enforcement Directorate (ED), in partnership with Punjab National Bank (PNB) and ICICI Bank, has begun the process of recovering and returning properties involved in the Mehul Choksi bank fraud case. This effort is aimed at helping the victims of the fraud and allowing banks to recover some of their losses by using or selling these seized properties.

To achieve this, a joint application was filed by PNB and ICICI Bank, with the support of the ED, asking the court to approve the monetisation (sale) of the seized properties. The Hon’ble Special PMLA Court in Mumbai approved this request, allowing the monetisation of properties worth ₹2565.90 crore that the ED had seized.

The process of returning these properties has already started, and assets worth over ₹125 crore have been handed over to the liquidator of M/s Gitanjali Gems Ltd., a company owned by Mehul Choksi. These assets include flats in Mumbai and two factories/godowns located in SEEPZ, Mumbai. The remaining properties are also being processed for handover.

How the Fraud Happened

The ED’s investigation revealed that Mehul Choksi, with the help of associates and officials at Punjab National Bank (PNB), fraudulently obtained Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs) between 2014 and 2017. This caused a loss of ₹6097.63 crore to PNB. Choksi also took loans from ICICI Bank, which he failed to repay.

To investigate the fraud, the ED searched over 136 locations across India and seized valuables and jewellery worth ₹597.75 crore from Choksi’s Gitanjali Group. In addition, they attached movable and immovable properties worth ₹1968.15 crore. These included real estate in India and abroad, vehicles, bank accounts, shares of listed companies, factories, and jewellery.

In total, assets worth ₹2565.90 crore were seized or attached, and three complaints were filed against Mehul Choksi under the Prevention of Money Laundering Act (PMLA).

Steps to Recover and Sell the Properties

To speed up the process of returning the properties to PNB and ICICI Bank, the ED worked closely with the banks. Together, they filed a joint application in court, asking for permission to sell the properties and deposit the money in the banks.

On September 10, 2024, the Hon’ble Special PMLA Court approved the application and ordered that the ED assist the banks and the liquidators of Gitanjali Group companies. The court directed that these properties be valued and auctioned, and the money from the sale be deposited as fixed deposits in PNB and ICICI Bank.

Progress Made So Far

So far, the ED has handed over six properties, including:

These properties have been given to the liquidator of M/s Gitanjali Gems Ltd. The process of transferring the remaining assets is ongoing, as per the court’s orders.

Significance of the Action

This action by the ED is a major step toward recovering the losses caused by one of India’s largest banking fraud cases. By returning the assets to the victim banks, the ED is not only helping them recover their money but also ensuring that justice is served.

This move also strengthens public trust in the government’s ability to fight money laundering and bank fraud. The remaining assets will soon be monetised with continued efforts, providing further relief to PNB and ICICI Bank.

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