Gitanjali Gems case : Fugitive Businessman Mehul Choksi is arrested in Belgium
Gitanjali Gems case
Gitanjali Gems case : Due to their violations of insider trading regulations in the Gitanjali Gems case, Sebi has fined fugitive businessman Mehul Choksi and one Rakesh Girdharlal Gajera ₹2.5 crore and banned them from the capital markets for a year.
Sebi has barred them for one year and levied a fine totalling ₹2.5 crore for violating insider trading rules in Gitanjali Gems case.
For two years, they have also been prohibited from purchasing, trading, or otherwise dealing with Gitanjali Gems Ltd. (GGL) stocks. Additionally, Gajera has been ordered by the Securities and Exchange Board of India (Sebi) to disgorge ₹15.82 crore.(Gitanjali Gems case)
Nirav Modi‘s maternal uncle, Choksi, is the promoter and managing director of Gitanjali Gems. Both men are accused of cheating the state-run Punjab National Bank (PNB) out of more than ₹14,000 crore.(Gitanjali Gems case)
Following the revelation of the PNB scam in early 2018, Choksi and Modi both left India. Modi is detained in a British prison and has contested India’s plea for extradition, while Choksi is reportedly in Antigua.
According to Sebi’s ruling, Choksi gave Gajera access to unpublished price sensitive information (UPSI), and Gajera sold all of his 5.75 percent stake in GGL in December 2017 in order to prevent a loss before the fraudulent issuance of letters of undertaking (LoUs) by Gitanjali Group was revealed.
It was observed that phony LoUs were issued on behalf of GGL and other Gitanjali Group companies. “Noticee no. 1 (Choksi) was found to have communicated UPSI (unpublished price sensitive information) to Noticee no. 2 (Gajera) without any underlying legal obligation or any legitimate purpose,” Sebi stated in its final order of sixty pages.
They broke the PIT (Prohibition of Insider Trading) regulations by engaging in such actions.
Gitanjali Gems case –
Furthermore, according to Sebi, Gajera violated the SAST (Substantial Acquisition of Shareholding and Takeover) Regulations by failing to disclose to the exchanges a change of more than 2% in his shareholding in GGL in December 2017 and holding more than 5% of the company’s total share capital during the quarter that ended in September 2017.
Therefore, Sebi banned the two individuals from “accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, whatsoever, for a period of 1 year”.
Additionally, the regulator fined Choksi ₹1.5 crore and Gajera ₹1 lakh. They have been given forty-five days to pay the fine.(Gitanjali Gems case)
In order to determine whether or not the suspected entities had traded in the shares based on UPSI, in violation of PIT standards, the regulator had investigated suspected insider trading activities of certain entities in the GGL scrip from May 2017 to February 2018.
Choksi, Gitanjali Gems, and another individual were fined ₹5 crore by the regulator in February 2020 for breaking a number of rules, including listing standards, related to the major PNB fraud.
Mehul Choksi’s legal team to appeal for bail on grounds of fugitive’s ongoing cancer treatment :
Fugitive Indian businessman Mehul Choksi, who was detained over the weekend in Belgium, is getting set to contest his imprisonment through the judicial system after previously being granted bail in Dominica.
In the meantime, plans are in motion to extradite him to India.(Gitanjali Gems case)
Vijay Aggarwal, his attorney, stated Monday that they would challenge Choksi’s parole, citing his poor condition and continuous cancer treatment, according to ANI.
That local police arrested Choksi after verifying his presence in India. Choksi is wanted in India for allegedly robbing Punjab National Bank (PNB) of Rs 13,850 crore. The 65-year-old diamantaire, who is also connected to his nephew Nirav Modi in the PNB fraud, departed India on January 2, 2018.
