Sebi gave clean chit to Choksi, claims Antigua

However, the Indian capital markets regulator rejected the claim saying it neither received any such request, nor provided any such information to the concerned department in Antigua.

Antigua has claimed it was told by Indian agencies that there was no adverse information against Mehul Choksi when it did a background check on the fugitive billionaire before granting him citizenship in 2017, a local media report in the Caribbean nation has said.

Official sources said the Ministry of External Affairs has received the extradition request from the CBI and is currently in the process of sending it to the authorities in Antigua and Barbuda.

While the Antiguan authority responsible for granting investment-linked citizenship named the Securities and Exchange Board of India (Sebi) as one of the Indian agencies to have given such a clearance in case of Choksi, the Indian capital markets regulator rejected the claim saying it neither received any such request, nor provided any such information to the concerned department in Antigua.

Choksi's application for citizenship in Antigua in May 2017 was accompanied with clearance from the local police as required by norms, Antiguan newspaper the Daily Observer reported, citing a statement from the Citizenship by Investment Unit of Antigua and Barbuda (CIU).

Choksi is one of the alleged masterminds of the $2 billion scam in state-run Punjab National Bank and uncle of fugitive diamantaire Nirav Modi.

"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 Mr Mehul Chinubbhai Choksi which would render him ineligible for grant of travel facilities including visa for Antigua and Barbuda," the report said.

The authorities in the island country did a thorough check on Choksi from open source global agencies, including the Interpol, and there was "no instance" of any derogatory information against him, it added.

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.

However, the Indian regulator issued a statement on Friday denying these claims.

"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 regulator said.

As per the Antiguan media report, 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.

Choksi had 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 Punjab National Bank, making it the biggest banking scam in the country.

On July 29, 2016, Bengaluru resident Hari Prasad had informed the Prime Minister's Office about alleged nefarious activities of Choksi and his companies.

In a recent response to a question by Congress leader Kapil Sibal, the finance ministry said in the Rajya Sabha that the PMO was "intimated" about the complaints regarding the PNB fraud in 2016 and the matter was referred to it.

"Ministry of finance, vide Office Memorandum dated 1.3.2018, apprised PMO of action taken regarding the fraudulent issuance of Letters of Undertaking in PNB," it said.

The reply, however, did not make it clear whether it referred to Prasad's specific complaint against Choksi.

Under the Citizenship by Investment Program of Antigua and 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 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.