A special court in Mumbai on Tuesday allowed the auction of assets worth Rs 2,565.9 crore linked to fugitive businessman Mehul Choksi.
Choksi is one of the prime accused, along with his nephew Nirav Modi, in the over Rs 13,000-crore Punjab National Bank fraud case.
The court’s decision to allow the auction came on an application from the victim banks, Punjab National Bank and ICICI Bank, for restitution of assets.
The proceeds of the auction would be held as fixed deposits by PNB and ICICI Bank, the court said, according to the Enforcement Directorate.
Following the order, the process of handing over assets worth more than Rs 125 crore to the liquidator of Choksi’s Gitanjali Gems Limited has been initiated, the central agency added.
“The handed over properties include flats situated at Mumbai and two factories/godowns situated at SEEPZ Mumbai,” said the Enforcement Directorate. “Restitution of rest of the properties is also in progress.”
The PNB fraud came to light in February 2018 when the bank informed the stock exchange BSE that it had detected “fraudulent and unauthorised transactions” worth Rs 11,380 crore at a branch in South Mumbai.
A few officials of the public sector bank had allegedly issued fraudulent Letters of Undertaking to Modi’s companies, resulting in the loss of Rs 6,097.6 crore to PNB.
Choksi had also defaulted on another loan he had taken from ICICI Bank.
He had fled India for Antigua and Barbuda in January 2018, a few weeks before the fraud came to light. He has secured the citizenship of the Caribbean country. The Indian government has demanded that Choksi be extradited.
Modi is currently in prison in the United Kingdom, where he is facing extradition proceedings.
Since 2018, the Enforcement Directorate has seized jewellery worth Rs 597.7 crore linked to Gitanjali Group. The agency has also attached immovable properties in India and overseas, vehicles, bank accounts, factory and shares of listed companies, among other things, worth Rs 1,968.1 crore.
To expedite the process of restitution, the PNB and ICICI Bank had filed a joint application before the Prevention of Money Laundering Act court.
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