SEBI Has Issued Rs. 5.35 Crore Fine To Fugitive Diamond Merchant Mehul Choksi

SEBI issued an ultimatum to fugitive entrepreneur Mehul Choksi on Thursday. It demanded Rs 5.35 crore in an instance involving illegal trading in Gitanjali Gems Ltd shares.

Also, threatened him with arrest and seizure of properties and bank accounts if the businessman did not pay within 15 days. Choksi received the demand notice after failing to pay a fine levied by the SEBI.

Choksi, Nirav Modi’s maternal uncle, was the chairman as well as the managing director of Gitanjali Gems. He was also a member of the promoter group.

Both are accused of robbing the government-owned Punjab National Bank, or PNB, of about Rs 14,000 crore. Choksi and Modi both fled India when the PNB scandal was exposed in early 2018.

While Choksi is believed to have been in Antigua and Barbuda, Modi remains detained in the United Kingdom. He has resisted India’s extradition request.

SEBI issued a new notice on Thursday directing Choksi to shell out Rs 5.35 crore. It includes interest and recovery costs and the payment has to be within 15 days.

In the event of nonpayment of fees, the market controller will seize and sell his moveable and immovable property to reclaim the sum. Choksi also faces bank account attachment and arrest.

SEBI fined him Rs 5 crore in an order issued in October 2022 for engaging in illicit transactions in Gitanjali Gems shares. In addition to the penalty, the regulator prohibited him from participating in the securities trade for ten years.

The regulator had given Choksi a standard show cause notice in May 2022 as part of an inquiry into alleged deceptive trading in Gitanjali Gems’ scrip. For the time frame July 2011 until January 2012, the regulator investigated the trading actions of several entities in the company’s scrip.

SEBI stated that Choksi funded a group of 15 businesses known as “front entities”
They were in some way affiliated with him and each other.

It was discovered that the corporation transferred cash to front entities worth Rs 77.44 crore, of which Rs 13.34 crore were utilized by front companies for trading in the stock.

Choksi attempted to corner the market through front entities to decrease the number of shares available to general investors. It subsequently increased after the front entities sold the shares in the market.

According to the ruling, the front companies cornered the position limitations in Gitanjali Gems’ scrip by building up significantly large holdings in the derivatives area. In February 2022, SEBI barred Choksi from investing in securities for a year.

It also fined him Rs 1.5 crore for violating the insider trading regulations in the Gitanjali Gems case. Again, the securities regulator penalized Choksi, his company, and another person a total of Rs 5 crore in February 2020 for breaking numerous rules.

It included listing standards, associated with the massive PNB fraud. Mehul Choksi, in addition to Nirav Modi as well as Vijay Mallya, is one of the most well-known economic offenders to have fled the country.

SEBI fined Gitanjali Gems Ltd and its directors Mehul Choksi and Dhanesh Sheth Rs 5 crores in February 2020. It was for violating listing responsibilities and revelations requirements (LODR) regulations, the equity listing agreement.

As well as a SEBI circular requiring prompt disclosure of material and price private data to stock exchanges. According to the judgment issued by SEBI adjudicating officer (AO) Santosh Shukla, “…the Notices were in knowledge of and were aware of all of the relevant events.”

“It merited the imposition of a monetary punishment equal to the default identified in the case. The repercussions in such instances should serve as an effective deterrent.”

SEBI suspended Choksi from the stock market for an entire year and penalized him Rs. 1.5 crores for breaking the rules on insider trading in the investigation of Gitanjali Gems in February 2022.

Choksi used the firms as his front and stacked financial transfers through various bank accounts owned by his front entities because he was not allowed to deal in the company’s shares and derivatives contracts as a promoter.

The examination of statements from bank accounts revealed the flow of cash from Choksi-controlled companies to his front companies and their trades, according to the SEBI ruling in October 2022.

According to SEBI’s inquiry, while the Sensex fell a little more than 8% from July 18, 2011, until January 25, 2012, the price of shares of Gitanjali Gems fell just approximately 2.5%. Choksi has been declared a criminal by the government.

Various charges are pending against him with agencies such as the CBI, the Enforcement Directorate, and the Department of Income Tax.

The CBI requested the CCF to reinstate the Red Notice against fugitive diamantaire Mehul Choksi in March, according to a statement issued by the agency. At the request of the CBI as well as the Enforcement Directorate, Interpol issued a Red Notice on Choksi in 2018.

In 2020, his challenges against the ruling were denied. Almost a year after his claimed abduction attempt, he petitioned the CCF, a distinct body.

It is under Interpol which is not within the supervision of the Interpol Secretariat. It is mostly composed of chosen lawyers from several nations, “to revise its prior choice of 2020,” according to the agency.

Roosevelt Skerrit, Prime Minister of Dominica, has dismissed queries raised about the mystery involving Mehul Choski, who had been purportedly abducted from Antigua and taken to Dominica. He stated the country had no further business with the man and it was merely a small affair.

Skerrit faced questions about the incident during a news conference on Wednesday. “In the case of Mr. Choski, the allegations for unauthorized entry to Dominica were dropped, and Mr. Choski was permitted to depart Dominica,” Skerrit said.

“So, as far as Dominica is worried, we have ended all business with Mr Choski.” He continued to explain that he does not become engaged in minor concerns concerning a crime or the law in Dominica.

In January, according to an investigation undertaken by Kenneth Rijock, a famous financial crimes investigator, criminal diamantaire Mehul Choksi was caught purchasing a security in Antigua by paying a string of officials.

In a news story on Blogger, Rijock made bombshell allegations about Mehul Choksi’s bribing and planning in Antigua, where authorities have interfered with Interpol’s attempts to apprehend him for deportation to India.

Chomsky, he claimed, had been plotting to fraudulently prolong the judicial process in Antigua by bribing officials in the government, notably senior Antigua police officer Adonis Henry.

Mehul Choksi cannot be deported from the country, according to the country’s High Court, which ruled in his favor in April. In his civil lawsuit, claimant Mehul Choksi argues that those being sued, the Attorney General of the country as well as the Chief of Police, must conduct a thorough investigation.

Also, he has a possible claim that he was given cruel treatment or punishment, according to Dominica-based Nature Isle News.

Choksi has sought remedies, including a declaration stating that he is entitled to a fast and full investigation into the conditions surrounding his forceful deportation from the country around May 23, 2021.

Proofread & Published By Naveenika Chauhan