Mehul Choksi, promoter of Gitanjali Gems, the leading gem and jewellery company, has pledged 9.18 lakh shares to Edelweiss Financial Services Ltd.

This development reduces his unpledged holding in the company from around 3.28 crore shares or 35.65 per cent stake, to 3.19 crore shares or 34.65 per cent stake. As on June 30, Choksi had 47.40 percent stake in the company.

It may be recalled that a few days ago, on July 18, 26 entities including firms and individuals, which also involved Mehul Choksi and companies associated with brokerage firm Prime Broking Company (India) Ltd. were suspended by market regulator SEBI and the bourses, as part of probe into suspected market manipulations, reports suggest. The suspension followed an investigation by SEBI and NSE into the trading activity of Prime Broking and trading activities of the 26 firms in Gitanjali Gems Ltd. All 26 entities are alleged to be linked to Prime Broking. Reports say that the brokerage firm is a ‘significant shareholder’ in Gitanjali Gems, where Mehul Choksi is the main promoter with 51 per cent stake.

According to reports, the 26 entities were involved in manipulative trades in the market and also may have been trading through separate client codes apart from the allotted Unique Client Codes (UCC), as an act to conceal their overall positions and margins.

Last week, stocks of Gitanjali Gems dropped sharply within the week, from Rs 150 to Rs 115, whereas a month ago the shares were trading much higher at about Rs 550.

Also, many of the investors had bought Gitanjali shares through Prime Broking, who pledged them apparently, without the consent of the investors, to take exposure on the derivatives segment of NSE.

Two of the 26 entities have filed a report against Prime Broking with the police reports against Prime Broking.

The 26 entities include Mehul Choksi, Manoj Madhav Vankar, Prime Securities, Prime Research and Advisory, Pinky Agro Foods, Primesec Investments, Sancheti Properties, Sharddha Garmewnts, Trusha Infra, Vankars Gems & Jewelleries. Prime Broking is a shareholder in prime Securities, which is also a listed company.