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The National Stock Exchange has completed its investigation in Prime Broking's trades in shares of Gitanjali Gems earlier this year. The exchange has communicated its findings to the stock market regulator, according to a person familiar with the matter. Details of the probe could not be ascertained.
“The recommendations have been submitted to Sebi(Securities and Exchange Board of India). An order can be expected soon,” said the person.
The National Stock Exchange had announced in June that it is investigating Prime Broking and related entities in relation to transactions in the shares of Gitanjali Gems. It also said that it had halted pay-out, or settlement of the deals being probed.
“Pending conclusion of investigations, as an interim measure, pay-out for today in respect of the transactions under investigation has been withheld by the Exchange. Intimation in this regard has been sent to respective members,” said the statement dated June 28.
It subsequently came out with a circular dated July 18, barring 26 entities in relation to the same case by deactivating their unique client code or UCC, used to identify market participants. The Securities and Exchange Board of India was also a part of the decision.
“Pursuant to the decision of SEBI and NSE which are investigating the trading activity of Prime Broking Company (India) Ltd. and trading in Gitanjali Gems Ltd. by set of clients, Unique Client Code (UCC) in respect of following entities/ persons are disabled from trading with immediate effect for a period of 6 months or till conclusion of investigation by NSE,” it said.
Among the entities whose client code was suspended include Mehul Choksi, promoter of Gitanjali Gems. He maintained that he had nothing to do with Prime.
An exchange spokesperson declined to comment. An email sent to the regulator did not immediately receive a reply.
Gems and jewellery giant Gitanjali had total revenue of Rs.10380.66 crore for the financial year ending March 2013. It had a net profit of Rs.265.16 crore, according to exchange data. Since then, its profits have nose-dived.
It was down 76.42 per cent in the June quarter over the same quarter last year, according to its unaudited results. The net profit fell from Rs.148.97 crore to Rs.35.12 crore.
A company spokesperson had pegged the fall to issues related to business problems following recent curbs on gold imports and liquidity issues.
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Prime Time For Gitanjali
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| June |
| NSE investigates Prime Broking related to transactions in the shares of Gitanjali |
| Halts payout of trades being probed |
| July |
| Disables trading for 26 entities |
| Includes Prime group entities as well as Mehul Choksi, Gitanjali's promoter |
| October |
| NSE completes probes |
| Sends recommendations to Sebi |
