The Securities and Exchange Board of India (SEBI) has taken decisive action against absconding diamantaire Mehul Choksi to recover outstanding dues of ₹2.1 crore related to insider trading violations. On June 4, 2025, SEBI ordered the attachment of Choksi's assets, including bank accounts, shares, and mutual fund (MF) holdings, initiating recovery proceedings to recoup the unpaid amount.

This action follows Choksi's failure to pay a fine initially imposed in January 2022. The penalty was levied on Choksi for communicating unpublished price-sensitive information (UPSI) related to Gitanjali Gems shares. SEBI's investigation revealed that Choksi, who served as the Chairman and Managing Director of Gitanjali Gems, had shared this sensitive information with Rakesh Girdharlal Gajera. Acting on this information, Gajera allegedly sold his entire 5.75% stake in Gitanjali Gems in December 2017, strategically avoiding losses before the disclosure of fraudulent activities within the company became public knowledge.

In its January 2022 order, SEBI imposed a penalty of ₹1.5 crore on Choksi and further barred him from participating in the securities market for a year. The regulatory body found that Choksi had violated Prohibition of Insider Trading (PIT) rules by communicating UPSI to Gajera without any legitimate purpose or legal obligation. The outstanding dues have since increased to ₹2.1 crore, inclusive of ₹60 lakh in interest.

SEBI's attachment notice, dated June 4, specifically directs all banks, depositories (CDSL and NSDL), and mutual funds to prevent any debits from Choksi's accounts. However, credits into these accounts are permitted. Furthermore, banks have been instructed to attach all accounts held by Choksi, encompassing even safety deposit lockers.

SEBI justified its actions by stating a reasonable belief that Choksi might attempt to dispose of funds across his bank accounts, mutual fund portfolios, and securities within his Demat accounts, potentially obstructing or delaying the recovery of the owed amount. To prevent such actions and ensure the recovery process is not hindered, SEBI has initiated these stringent measures.

This isn't the first time SEBI has pursued Choksi for financial penalties. In May 2023, a notice was issued to Choksi demanding payment of ₹5.35 crore related to fraudulent trading in Gitanjali Gems shares.

Mehul Choksi, along with his nephew Nirav Modi, is a central figure in the Punjab National Bank (PNB) scam, which involves alleged fraud of over ₹14,000 crore. Both individuals fled India in early 2018 after the PNB scam surfaced. Choksi has been residing in Antigua since 2018, while Modi is currently jailed in the UK after being arrested in London in March 2019. Recent reports indicate that Choksi was also arrested in Belgium earlier this year, and faces extradition proceedings. Additionally, a Mumbai court issued a non-bailable warrant against Mehul Choksi in connection with a separate bank fraud case involving approximately ₹55 crore.