Gitanjali Ratna case: Sebi bans Mehul Choksi, another person from markets

Further, they have been barred from buying, selling or otherwise transacting in the securities of Gitanjali Gems Limited (GGL) for a period of two years. Also, the Securities and Exchange Board of India (SEBI) has directed Gajera to set aside an amount of 15.82 crores.

Choksi, the promoter and managing director of Gitanjali Gems, is the maternal uncle of Nirav Modi, both of whom are accused of defrauding Punjab National Bank (PNB). 14,000 crores.

Both Choksi and Modi fled India after the PNB scam surfaced in early 2018. Choksi is said to be in Antigua, Modi is lodged in a British prison and has challenged India’s extradition request.

Sebi said in its order that Choksi sent unpublished price sensitive information (UPSI) to Gajra, which had sold his entire 5.75 per cent stake in GGL in December 2017, to avoid losses before the LoUs were revealed to be fraudulent. . undertaking) by Gitanjali Group.

It was noted that fraudulent LoUs were issued on behalf of entities belonging to Gitanjali Group including GGL. “Notice No. 1 (Choksi) has communicated notice No. 2 (Gajera) to UPSI (Unpublished Price Sensitive Information) without any implied legal obligation or any lawful purpose,” SEBI said in its 60-page final order.

Through such activities, he violated the provisions of PIT (Prohibition of Insider Trading) Rules.

Further, SEBI noted that Gajra held more than 5 per cent of the total share capital of GGL during the quarter ended September 2017 and failed to disclose more than 2 per cent change in its shareholding in GGL to the exchanges in December 2017. Stayed. thereby violating the SAST (Substantial Acquisition of Shareholding and Takeover) Regulations.

Accordingly, SEBI has barred the two persons “from access to the securities market and from buying, selling or otherwise, directly or indirectly, or in any manner connected with the securities market, for a further period of 1 year” Have applied. “.

In addition, the regulator imposed a fine 1.5 crore more on Choksi 1 crore on Gajra. They have been directed to pay the fine within 45 days.

The regulator had probed suspected insider trading activities of certain entities in the shares of GGL for the period May 2017 to February 2018 to ascertain whether the suspected entities had traded in shares on the basis of UPSI in contravention of the PIT or No. Criteria.

In February 2020, the regulator imposed a total fine 5 crore on Choksi, Geetanjali Gems and one other person for violating various rules including listing norms in relation to large scale fraud in PNB.