Securities and Exchange Board of India (Sebi) fined Chaitya Rajesh Shah Rs 5 lakh on Friday for failing to comply with disclosure standards while trading in Gitanjali Gems Ltd shares.
Gitanjali Gems, owned by Mehul Choksi, topped the list of wilful defaulters, owing Rs 5,693 crore, last year. Gitanjali used to sell its jewellery from over 4,000 points of sale and has a market share of more than 50% of India's organised jewellery market. Nakshatra, D'damas, Gili, Asmi, Sangini, Maya, Giantti, World of Solitaire, and Shuddhi were among the group's notable brands.
During the period of May 31, 2017, to February 5, 2018, the Securities and Exchange Board of India (SEBI) examined Gitanjali Gems' scrip. During the investigation, the regulator discovered that the noticee - Chaitya Rajesh Shah - owned 5.80% of Gitanjali Gems' total share capital as of September 30, 2017.
During the investigation, he made sales, and his sale totalled more than 2% of the company's overall shareholding. As a result, he had to make reports to both the exchange and the firm.
However, Sebi stated in an order that the noticee has yet to file a disclosure with respect to his stock disposition.
"any person holding more than 5% of the total shareholding of a target company is required to disclose the number of shares or voting rights held and change in shareholding or voting rights, even if such change results in shareholding falling below 5% if there has been changing in such holdings from the last disclosure made under sub regulation (1) or under this sub regulation; and such change exceeds two per cent of total shareholding or voting rights in the target company, in such form as may be specified." the statement said.
The Gitanjali Group was one of the world's largest retailers of branded jewellery. The company's headquarters were in Mumbai, India. It was shut down as a result of the Punjab National Bank fraud.