SEBI has barred Mehul C. Choksi for 10 years and imposed a penalty of ₹5 crore, pursuant to an investigation into the alleged manipulative trading in the scrip of Gitanjali Gems.

It may be recalled that SEBI on January 31 had restrained Choksi from accessing the securities market for one year.

One-year ban

In the earlier order, SEBI had ruled Choksi, along with director Rakesh Girdharlal Gajera, violated insider trading rules while trading Choksi’s jewellery business Gitanjali Gems and imposed a joint fine of ₹2.5-crore split between Choksi and Gajera, along with the one-year ban from any trading whatsoever.

Besides, both Choksi and Gajera were prohibited to buy, sell, or deal in securities of Gitanjali Gems Ltd for a period of two years. SEBI also ordered Gajera to disgorge a sum of ₹15.82 crore as part of the matter.

In the latest order, Ashwani Bhatia, whole-time member, SEBI, said: “As per publicly available information, Mehul Choksi has fled the country on January 4, 2018, and is stated to be residing in Antigua and Barbuda. Cases were filed against him in India in the wake of the Punjab National Bank scam... Further, the Directorate of Enforcement has also registered a case against Mehul Choksi, again acting on a complaint filed by PNB. I note that a charge-sheet has now been filed in both the matters. The ED, in 2019, had also moved an application before the PMLA Court seeking that Choksi be declared a Fugitive Economic Offender under the Fugitive Economic Offenders Act, 2018. (The matter is currently pending before the Bombay High Court).”

Apart from this, it is noted that the Income-Tax Department has also initiated proceedings against Mehul Choksi.

He should remit/pay the penalty within 45 days of receipt of this order, Bhatia said.

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