SEBI Orders Attachments of Bank Accounts, Shares, and Mutual Fund in Insider Trading Breach

Markets watchdog SEBI has taken a decisive step to reclaim dues amounting to Rs 2.1 crore from fugitive businessman Mehul Choksi by ordering the seizure of his bank funds, shares, and mutual fund holdings due to a breach of insider trading regulations involving Gitanjali Gems stocks. The move comes on the heels of a notice released on May 15 alerting Choksi of the imminent confiscation of his assets and bank funds should he disregard to settle the outstanding amount within a 15-day window. This decision was prompted by Choksi’s failure to pay off a previously levied fine by SEBI in January 2022 concerning a violation of insider trading norms associated with Gitanjali Gems Ltd.

Choksi, who served as the chairman and managing director of Gitanjali Gems and was among its promoter group, is the maternal uncle of Nirav Modi. Both individuals are currently entangled in charges of duping state-controlled Punjab National Bank (PNB) of a staggering sum exceeding Rs 14,000 crore. The notorious pair hastily absconded from India following the unearthing of the PNB scandal in early 2018. In Belgium, Choksi encountered apprehension in April due to an extradition request by Indian investigative agencies. His presence in Belgium was brought to light when he sought medical treatment there the previous year. Since departing India in 2018, Choksi has been residing in Antigua. Meanwhile, Modi was apprehended by the Scotland Yard Police in March 2019 and is presently behind bars in that country.

A recent attachment notice furnished by SEBI on June 4 disclosed that the outstanding dues of Rs 2.1 crore encompass an original fine of Rs 1.5 crore alongside a Rs 60 lakh interest accrual. In its efforts to recuperate the dues, SEBI has instructed all banks, depositories like CDSL and NSDL, and mutual funds to prevent any withdrawals from the accounts held by Choksi. Although, he may still receive deposits, credit from external sources. Furthermore, banks have been mandated by SEBI to secure all accounts, including lockers, maintained by Choksi to expedite the retrieval of the owed sum.