Gitanjali Gems stocks plunge 20% on $1.8 bn scam, PNB slips 2%

Gitanjali Gems stocks plunge 20% on $1.8 bn scam, PNB slips 2%

The proposed suspension of passports of Modi and Choksi comes days after the PNB reported a fraud of Rs 11,400 crore committed by both with the help of employees of the Mumbai branch of the bank. PC Jeweller shed over 6 percent intraday while SRS fell 4.2 percent and was the other stock to join the 52-week low club.

Over the last three trading sessions, while LIC incurred a notional loss of Rs 11.4 crore on account of fall in share price of Gitanjali Gems, that on account of its holding in PNB and Union Bank of India amounts to Rs 1,216 crore and Rs 104 crore respectively.

"It seems that the company was in the process of winding up the store", the official said.

"Four big jewellers-Gitanjali, Ginni, Nakshatra and Nirav Modi-are under scanner. The CBI and Enforcement Directorate are looking at their arrangements with various banks and end-use of money raised", said a senior official.

Incidentally, in July 2013, NSE in consultation with Sebi had debarred Gitanjali Gems chief and main promoter Mehul Choksi among others from trading, for securities market violations relating to trading in his company.

"Sebi accords utmost importance to market conduct and integrity".

Punjab National Bank yesterday detected some fraudulent transactions with financial implication of United States dollars 1.77 billion (about Rs 11,346 crore) and the matter has been referred to law enforcement agencies for the recovery. ICAI president Naveen N.D. Gupta told PTI it has taken suo motu (on its own) cognisance of the alleged fraud at PNB and its financial reporting review board (FRRB) has been advised to review PNB and Gitanjali Gems.

The company belonged to billionaire jewellery designer Nirav Modi's business partner and uncle Mehul Choksi.

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