Sebi attaches bank, demat, MF accounts of Mehul Choksi to recover Rs 2.1 cr dues

In April, Choksi was arrested in Belgium following an extradition request by Indian probe agencies. He was located in Belgium last year when he went there for getting medical treatment. He had been staying in Antigua since 2018 after leaving India.

Modi was arrested by the Scotland Yard Police in March 2019 and is currently in jail in that country.

In an attachment notice dated June 4, Sebi said the pending dues of Rs 2.1 crore include the initial fine of Rs 1.5 crore and interest of Rs 60 lakh.

To recover the dues, Sebi asked all the banks, depositories — CDSL and NSDL — and mutual funds not to allow any debit from the accounts of Choksi. However, credits have been permitted. Further, Sebi has directed the banks to attach all accounts, including lockers, held by the defaulter.

Initiating the recovery proceedings, Sebi said there is sufficient reason to believe that Choksi may dispose of the amounts in the bank accounts, mutual fund folios and securities in the demat accounts held with the depositories and "realisation of the amount due under the certificate would, in consequence, be delayed or obstructed".

In its order passed in January 2022, the regulator imposed a penalty of Rs 1.5 crore on Choksi and restrained him from the securities market for one year.

Sebi had found that Choksi communicated unpublished price sensitive information to one Rakesh Girdharlal Gajera, who sold his entire shareholding of 5.75 per cent in Gitanjali Gems in December 2017 with the intention of avoiding loss ahead of any event which may lead to disclosure of fraudulent issuance of LoUs (letter of undertaking) to Gitanjali Group and magnitude in public domain.

It was noted that fraudulent LoUs were issued on behalf of entities belonging to the Gitanjali Group, including GGL. "Noticee no. 1 (Choksi) was found to have communicated UPSI (unpublished price sensitive information) to Noticee no. 2 (Gajera) without any underlying legal obligation or any legitimate purpose," Sebi had said in its final order.

Through such activities, the two persons had violated the provisions of the PIT (Prohibition of Insider Trading) rules. In May 2023, Sebi sent a notice to Choksi directing him to pay Rs 5.35 crore in a case pertaining to fraudulent trading in the shares of Gitanjali Gems.