Choksi, who was the administrator and overseeing chief as well as a feature of advertiser gathering of Gitanjali Jewels, is the maternal uncle of Nirav Modi. Both of whom are having to deal with penalties of cheating state-possessed Punjab Public Bank (PNB) of more than Rs 14,000 crore.
Both Choksi and Modi escaped India after the PNB trick became exposed in mid 2018. While Choksi is supposed to be in Antigua and Barbuda, Modi is stopped in an English prison and has tested India’s removal demand.
The current procedures exude from a typical show cause notice gave by Sebi in May 2022 against Choksi compliant with an examination by the controller into the supposed manipulative exchanging the scrip of Gitanjali Diamonds. The controller directed an examination concerning the exchanging exercises of specific substances the scrip of the organization for the period July 2011 to January 2012.
In its structure, Sebi said that Choksi had financed a bunch of 15 elements known as ‘front substances’, who were straightforwardly or by implication associated with him and with one another and who had taken position in the scrip of Gitanjali Jewels both in the money and subordinate sections during the examination time frame. He had involved them as front substances for control in the organization’s scrip.
It was seen that the asset moves by the organization to front substances were to the degree of Rs 77.44 crore, out of which assets to the tune of Rs 13.34 crore were utilized by front elements to exchange the scrip.
The controller noticed that promptly before the examination period, the portions of Gitanjali Pearls, barring advertiser holding and possessions of banks/monetary organizations/FPIs, accessible to the overall financial backers was 28.96 percent for the quarter finished June 2011. This was diminished to 19.71 percent in the quarter finished September 2011. Thusly, the offers accessible to general financial backers expanded to 25.36 percent post the examination period.
This shows that Choksi, through front elements, attempted to corner the offers accessible in the market during the examination time frame to lessen the offers accessible for general financial backers which accordingly expanded after the front substances sold the offers on the lookout. Further, the front elements cornered as far as possible in the scrip of Gitanjali Pearls by developing significantly enormous situation in the subsidiaries fragment.
“I find that the previously mentioned discoveries combined with the noticee’s (Mehul C Choksi) inability to disprove the said discoveries, obviously lays out the noticee’s job in formation of bogus and deluding appearance of exchanging the scrip of GGL by involving and subsidizing the front elements in executing controlled exchanges.
“I in this manner find that the noticee has abused the arrangements of… PFUTP (Preclusion of Fake and Unreasonable Exchange Practices (PFUTP) Guidelines,” Sebi Entire Time Part Ashwani Bhatia said in his 20-page request.
Likewise, the controller has limited Choksi “from purchasing, selling or in any case managing in protections, straightforwardly or by implication, in any way at all and is additionally denied from getting to the protections market, for a time of a decade … and the noticee will suffer a financial consequence of Rs 5 crore.”
In February this year, Sebi had precluded Choksi from the protections markets for one year and exacted a fine of Rs 1.5 crore on him for disregarding insider exchanging rules the question of Gitanjali Jewels.
In February 2020, the controller slapped a complete fine of Rs 5 crore on Choksi, Gitanjali Pearls and one more person for disregarding different guidelines, including posting standards, regarding the enormous extortion on PNB.