Friday, June 16, 2023

Sebi instructs banks and MFs to freeze Mehul Choksi's accounts


MUMBAI: After Mehul Choksi failed to pay a penalty of Rs 5 crore for manipulating the stock price of his company Gitanjali Gems, the market regulator Sebi has instructed all banks to freeze his accounts. Sebi also asked mutual funds not to redeem any of his units and ordered the freezing of all his demat accounts for the same reason.

After its investigations revealed that Choksi had manipulated Gitanjali Gems' stock price between July 2011 and January 2012, Sebi issued an order in October 2022. Twenty Choksi-related entities were found to have influenced the stock price. Choksi was then penalized Rs 5 crore. Sebi has now moved to recover the Rs 5 crore penalty and an additional Rs 35 lakh as interest on the penalty from Choksi's bank and demat accounts due to his failure to pay the amount of the penalty. On Wednesday, the Sebi order was approved.

Choksi was a promoter group member as well as the chairman and managing director of Gitanjali Gems. He is Nirav Modi's maternal uncle, a fugitive businessman who is also thought to have defrauded Punjab National Bank of approximately Rs 14,000 crore. After the PNB scam was exposed in 2018, both Choksi and Modi fled India. They are currently among the most wanted individuals by the country's investigative agencies.

In the West Indies, Choksi currently has its headquarters in Antigua and Barbuda. Sebi claims that he is currently stationed on Harbour Island, Jolly Harbour, in the island nation's St. Mary's South. Through the recovery notice, Sebi has asked all banks, mutual fund companies, and the two depositories CDSL and NSDL not to debit Choksi's accounts. Additionally, the regulator has instructed all banks to attach Choksi's locker accounts. It has also requested all of the businessman's accounts for loans and advances.

Sebi's investigations revealed that Choksi had engaged in circular trading to boost the stock price by using Gitanjali Gems promoter companies and other associated businesses. The operation also involved a number of the company's employees and associated organizations.

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