India fines jewellery firm Gitanjali Gems for withholding information in $2 billion bank fraud

India’s securities regulator on Thursday fined jewellery retailer Gitanjali Gems Ltd and its executives 50 million rupees ($695,700) for failing to disclose key information related to a $2 billion fraud at Punjab National Bank (PNB).

Gitanjali’s promoter and managing director, Mehul Choksi; his nephew, billionaire jeweller Nirav Modi, and others were accused of being involved in fraudulent transactions that led to losses of roughly $2 billion for PNB.

PNB, India’s second-biggest state-run bank, in 2018 alleged that a few rogue employees had issued fake bank guarantees over several years to help jewellery groups – controlled by Modi and Choksi – raise funds in foreign credit. Both have denied any wrongdoing.

Gitanjali failed to properly disclose the withdrawal of the credit limit by PNB, actions by various enforcement agencies relating to the case and the resignation of key executives, the Securities and Exchange Board of India (SEBI) said in an order.

The regulator also said that Gitanjali Gems failed to make proper disclosures about defaulting on bond payments owed to state-run Life Insurance Corp, India’s largest insurer.

Modi was arrested in London in March last year and is currently fighting extradition to India, while Choksi, according to reports, is residing in the Caribbean nation of Antigua and Barbuda.

Courtesy: FASHIONNETWORK