Key Points
- SEBI attaches Mehul Choksi’s bank, demat, and mutual fund accounts to recover ₹2.1 crore dues.
- Action follows Choksi’s failure to pay penalty for insider trading in Gitanjali Gems shares.
- Choksi, key accused in ₹13,850 crore PNB scam, was arrested in Belgium in April 2025.
- Regulator moves to prevent disposal of assets amid ongoing extradition proceedings.
- Choksi’s accounts and lockers across all banks and depositories have been frozen.
SEBI has escalated its enforcement against fugitive diamond merchant Mehul Choksi, ordering the attachment of his bank accounts, demat accounts, mutual funds, and even lockers, in a bid to recover ₹2.1 crore in unpaid penalties and interest stemming from insider trading violations in Gitanjali Gems shares.
Why Has SEBI Taken This Action?
The crackdown comes after Choksi failed to pay a penalty of ₹1.5 crore imposed by SEBI in January 2022 for sharing unpublished price-sensitive information (UPSI) with associate Rakesh Girdharlal Gajera. Gajera subsequently sold his entire 5.75% stake in Gitanjali Gems in December 2017, allegedly to avoid losses before the company’s fraudulent activities became public.
Despite a demand notice issued on May 15, 2025, giving Choksi 15 days to settle the dues, he did not comply. SEBI then moved to attach his assets, fearing he might liquidate or transfer funds to obstruct recovery.
What Does the Attachment Order Involve?
- Freeze on Withdrawals: All banks, depositories (CDSL, NSDL), and mutual funds have been instructed not to allow any debits from Choksi’s accounts, though credits are permitted.
- Lockers Seized: Banks have been ordered to freeze all lockers held by Choksi.
- Comprehensive Asset Attachment: The order covers all bank accounts, demat accounts, mutual fund folios, and lockers in Choksi’s name.
- Disclosure Requirements: Financial institutions must provide SEBI with details and statements of all accounts and assets held by Choksi.
The Insider Trading Case
SEBI’s investigation found that Choksi, then Chairman and Managing Director of Gitanjali Gems, communicated UPSI to Gajera without a legitimate purpose. This allowed Gajera to exit his holdings ahead of the public disclosure of fraudulent Letters of Undertaking (LoUs) issued by the Gitanjali Group, violating Prohibition of Insider Trading (PIT) rules.
Choksi was also barred from the securities market for one year as part of the January 2022 order.
The Larger PNB Scam Context
Mehul Choksi is a central figure in the ₹13,850 crore Punjab National Bank (PNB) scam—one of India’s largest banking frauds—alongside his nephew Nirav Modi. The duo allegedly colluded with PNB officials to secure fraudulent LoUs, enabling them to siphon off funds from the bank under the guise of trade finance.
Both fled India in early 2018 when the scam surfaced. Choksi had been residing in Antigua before traveling to Belgium for medical treatment, where he was arrested in April 2025 on India’s extradition request. Nirav Modi, meanwhile, remains in a UK jail, fighting extradition to India.
What’s Next for Choksi?
Choksi is currently in Belgian custody, contesting extradition to India. His legal team is expected to challenge the process on health and legal grounds, potentially delaying his return for trial. Indian authorities, however, are intensifying efforts to bring him back and recover defrauded funds.
SEBI has launched a sweeping asset freeze against Mehul Choksi, attaching his bank accounts, demat holdings, mutual funds, and lockers to recover ₹2.1 crore in unpaid penalties for insider trading. This move is the latest in a series of enforcement actions against the fugitive businessman, who remains a key accused in the massive PNB scam and is currently in Belgian custody awaiting extradition to India.
