SEBI imposes Rs 5-crore fine on Mehul Choksi, others in PNB case

Fugitive diamond trader Mehul Choksi. (File)

The Securities and Exchange Board of India (Sebi) has imposed a fine of Rs 5 crore on fugitive diamond trader Mehul Choksi, his firm Gitanjali Gems and an official of the company for violating various regulations, including listing norms in connection with Rs 14,000-crore fraud at Punjab National Bank.

The regulator said it is imposing a fine totalling Rs 5 crore on Choksi, Gitanjali Gems and Dhanesh Sheth, executive director at Gitanjali. “The default is grave and the gravity of this matter cannot be ignored,” Sebi said in its order. It quoted a communication from PNB that it had reported to the RBI total fraud of over Rs 11,394 crore in case of unauthorised issuance of LoUs (letters of undertaking), foreign letters of credit and inland letter of guarantees in the group accounts of Nirav Modi Group and Gitanjali Group and in the account of one Chandri Paper & Allied Products Pvt Ltd.

Choksi is the promoter and managing director of Gitanjali Gems. He is the maternal uncle of Nirav Modi, who is also facing charges for defrauding PNB. Sebi has penalised the entities for failing to make various requisite disclosures. Gitanjali has not made disclosures regarding withdrawal of credit limits by PNB in view of the alleged fraud by the firm and its subsidiaries, the sudden obligation to repay Rs 1,045.88 crore within 10 days and subsequent developments.