SEBI Issues Rs 5.35 Crore Notice To Fugitive Mehul Choksi

Sebi directed Choksi to pay Rs 5.35 crore inside 15 days.

New Delhi:

Sebi on Thursday despatched a discover to fugitive businessman Mehul Choksi asking him to pay Rs 5.35 crore in a case pertaining to fraudulent buying and selling within the shares of Gitanjali Gems Ltd and warned of arrest and attachment of property in addition to financial institution accounts if he fails to make the cost inside 15 days.

The demand discover got here after Choksi didn’t pay a high-quality imposed on him by the Securities and Trade Board of India (Sebi).

Choksi, who was the chairman and managing director in addition to a part of promoter group of Gitanjali Gems, is the maternal uncle of Nirav Modi. Each of whom are going through costs of defrauding state-owned Punjab Nationwide Financial institution (PNB) of greater than Rs 14,000 crore.

Each Choksi and Modi fled India after the PNB rip-off got here to gentle in early 2018. Whereas Choksi is alleged to be in Antigua and Barbuda, Modi is lodged in a British jail and has challenged India’s extradition request.

In a contemporary discover on Thursday, Sebi directed Choksi to pay Rs 5.35 crore, which incorporates curiosity and restoration value, inside 15 days.

Within the occasion of non-payment of dues, the markets regulator will get better the quantity by attaching and promoting his moveable and immoveable property. Moreover, Choksi faces attachment of his financial institution accounts and arrest.

In its order handed in October 2022, Sebi imposed a high-quality of Rs 5 crore on him for indulging in fraudulent buying and selling within the shares of Gitanjali Gems. Other than penalising, the regulator had barred him from the securities marketplace for 10 years.

The regulator had issued widespread present trigger discover to Choksi in Might 2022 pursuant to an investigation into the alleged manipulative buying and selling within the scrip of Gitanjali Gems. The regulator carried out an investigation into the buying and selling actions of sure entities within the scrip of the corporate for the interval July 2011 to January 2012.

Sebi stated that Choksi had funded a set of 15 entities often called ‘entrance entities’, who have been instantly or not directly linked with him and with one another and who had taken place within the scrip of Gitanjali Gems each within the money and spinoff segments in the course of the investigation interval. He had used them as entrance entities for manipulation within the firm’s scrip.

It was noticed that the fund transfers by the corporate to entrance entities have been to the extent of Rs 77.44 crore, out of which funds to the tune of Rs 13.34 crore have been utilized by entrance entities to commerce within the scrip.

Choksi, by means of entrance entities, tried to nook the shares out there available in the market to scale back the shares out there for normal buyers which subsequently elevated after the entrance entities bought the shares available in the market.

Additional, the entrance entities cornered the place limits within the scrip of Gitanjali Gems by increase considerably giant positions within the derivatives phase, as per the order.

In February 2022, Sebi had prohibited Choksi from the securities markets for one 12 months and levied a high-quality of Rs 1.5 crore on him for violating insider buying and selling guidelines within the matter of Gitanjali Gems and in February 2020, the regulator slapped a complete high-quality of Rs 5 crore on Choksi, Gitanjali Gems and one other particular person for violating varied rules, together with itemizing norms, in reference to the large fraud on PNB. 

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