A special Central Bureau of Investigation (CBI) court in Mumbai has issued an open-ended, non-bailable arrest warrant against Hong Kong-based businessman Jayesh Shah in connection with the Punjab National Bank (PNB) fraud case involving companies associated with Mehul Choksi's Gitanjali Group.
The warrant follows allegations that Shah did not return to India to participate in the investigation despite being contacted by the CBI. The agency has alleged that he was involved in financial irregularities linked to fraudulent banking instruments used to obtain overseas credit facilities.
Shah is reportedly a partner in Hong Kong-based 4C’s Diamonds Distributors and is alleged to have managed the company's operations.
Why Did the Court Issue the Arrest Warrant?
According to the supplied report, the court issued the warrant after considering the CBI's submission that Shah had been residing in Hong Kong and had not agreed to return to India for questioning.
The agency reportedly contacted him by email on March 3, 2021, and subsequently communicated with him over the telephone, asking him to participate in the investigation. However, Shah allegedly declined to travel to India.
The CBI later obtained a Red Corner Notice against him as part of its efforts to trace his whereabouts and facilitate action through international law-enforcement channels.
While allowing the agency's application, the special court reportedly observed that Shah was knowingly remaining outside India to avoid prosecution.
An open-ended non-bailable warrant is a significant judicial measure in criminal proceedings. It authorises the arrest of the named accused when located, subject to applicable legal procedures. The warrant does not itself establish guilt.
Supplementary Chargesheet Names Four Accused
Jayesh Shah was named in a supplementary chargesheet filed by the CBI in July, according to the report.
Other individuals included in the chargesheet were:
Bishnubrata Mishra: Former internal chief auditor of Punjab National Bank.
Ajit Bheda: Import-export manager at Gitanjali Gems.
Deepan Shah: Senior vice-president of Gitanjali Gems.
The investigation alleges that these individuals were involved in irregularities connected with the issuance and handling of fraudulent banking instruments.
Their alleged roles form part of the wider investigation into how banking facilities were obtained and used by companies associated with the Gitanjali Group.
Alleged Issuance of 118 Fraudulent Letters of Undertaking in 2015
A central part of the case concerns Letters of Undertaking (LoUs), which are banking instruments used to support credit arrangements, particularly in international trade.
According to allegations recorded in the court's July 29 order, the accused conspired with others to obtain 118 fraudulent LoUs during 2015.
These instruments were allegedly issued on behalf of Gili India and Gitanjali Exports Corporation.
The court reportedly noted that Gitanjali Exports did not have a sanctioned credit limit with PNB. The company was subsequently merged with Gitanjali Gems.
Investigators are examining how the instruments were issued despite the alleged absence of the necessary banking approvals and whether the transactions complied with the bank's internal procedures.
Another 116 Alleged Fraudulent LoUs Issued in 2016
The CBI's allegations extend to a further 116 LoUs reportedly issued during 2016 for different companies.
According to the supplied report, these transactions were allegedly not entered into PNB's core banking system, raising concerns about the bank's transaction-recording and monitoring controls.
Investigators have also alleged that the accused facilitated the issuance of fraudulent LoUs and amendments to Foreign Letters of Credit.
The alleged irregularities form part of the agency's examination of how overseas credit facilities were obtained and how the banking instruments were processed.
The investigation is therefore not limited to individual transactions but also concerns the internal systems and approval procedures through which the instruments were reportedly issued.
Wider PNB Fraud Case Involving Gitanjali Group and Nirav Modi
The proceedings against Jayesh Shah are connected to the much larger PNB fraud case, which has been estimated at approximately ₹23,000 crore in the supplied report.
The broader investigation involves companies associated with Mehul Choksi and his nephew, diamond trader Nirav Modi.
The CBI has investigated the alleged misuse of banking facilities and the roles of individuals and corporate entities connected with the transactions.
The latest warrant represents another legal development in efforts to pursue accused individuals based outside India. It also highlights the challenges investigators can face when financial-crime cases involve overseas businesses, international banking arrangements and individuals residing in other jurisdictions.
What Happens Next?
The issuance of the warrant creates a further legal step in the proceedings against Shah. Any arrest or subsequent court action will depend on the applicable legal and international procedures.
The allegations concerning the LoUs, banking approvals and the accused individuals' roles will ultimately require judicial examination. The warrant should not be interpreted as a final finding of criminal liability.
The case also underlines the importance of strong banking controls, transaction monitoring and independent financial scrutiny. Institutions and businesses seeking to strengthen financial oversight can explore Shunyatax's financial investigation services.