As ED moves to label Mehul Choksi a fugitive, Gitanjali Gems shares slip by 3%
On July 4, shares of Mehul Choksi’s jewellery brand Gitanjali Gems dropped by over three percent following the Enforcement Directorate’s (ED’s) application to a special Mumbai court to label Choksi a “fugitive economic offender”.
Although Gitanjali Gems had previously said the fraud scandal at the Punjab National Bank (PNB), in which its owner Choksi is implicated, had not been harming trade, the brand’s share price decreased by 3.56 percent on Wednesday at the close of the market to Rs 3.79 per share. This has led to speculation as to what will happen to the jewellery brand as the case continues.
The drop in share price follows the ED’s announcement that it is making moves to officially label Choksi a “fugitive economic offender” due to charges against him under the Prevention of Money Laundering Act (PMLA). A recent report by the Indian Express also revealed that at least seven Gitanjali Group employees, including the Company Secretary, told the ED that the secretarial department of Gitanjali Gems Ltd. would regularly submit fake board meeting minutes to the Registrar of Companies (RoC).
The ED is hoping to confiscate around Rs 6,000 crore worth of assets from Choksi, his family, and his companies and this is amount of money that he is accused of having fraudulently obtained from a consortium of banks led by the PNB. After a lull in the PNB fraud case, the issuing of a Red Corner Notice against Choksi’s nephew Nirav Modi and moves to confiscate assets from both has got the ball rolling again.
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