Markets regulator Sebi has banned fugitive businessman Mehul Choksi, former promoter and chairman of Gitanjali Gems, from trading for 10 years for using front entities to trade in shares of the company to maintain its price from falling. Choksi has also been fined £500,000 for the same Sebi rule violations that restricts promoters of a company from trading in shares or derivatives contracts.
Choksi had defrauded PNB and in January 2018 and fled the country. Currently he’s been proclaimed an offender by the government and several cases against him, by agencies like CBI, ED and the I-T department, are pending.
Sebi’s probe showed that between July 18, 2011 and January 25, 2012, while the sensex slid a little over 8%, the stock price of Gitanjali Gems dropped about 2. 5%. During this period, Choksi had used several entities, companies and individuals that acted as his front, to trade in the stock of Gitanjali Gems to maintain its price.