NSE allows Prime Broking, Gitanjali's Choksi to trade

All entities of Prime Broking Group and Mehul Choksi, promoter of Gitanjali Gems will be able to trade in shares on NSE

The National Stock Exchange (NSE) has enabled unique client codes (UCCs) of 26 clients including the ones of Prime Broking and Mehul Choksi, chairman and managing director of Gitanjali Gems after three months of deactivation.

With this, all these entities of Prime Broking Group and Mehul Choksi, the promoter of Gitanjali Gems will be able to trade in shares on NSE.

NSE in a circular posted on its website late Tuesday evening said that 26 UCCs have been enabled which includes the name of Choksi and three identifiable names in the list related to Prime Broking. The client codes of Prime Research and Advisory Ltd, Prime Securities Ltd and Primesec Investments Ltd have been enabled.

These entities and Choksi were banned from trading on NSE on July 18 due to the investigations by both NSE and SEBI over the alleged link between Choksi and Prime Broking which resulted into over 90% fall in Gitanjali’s share price. These UCCs were banned for a period of six months or till the investigations are over, whichever is earlier.

“Enabling the UCCs does not mean we have given them a clean chit. We have submitted our report on investigations to the Securities and Exchange Board of India (SEBI). Whatever actions SEBI will take we will implement it,” said an NSE official.

NSE had already declared Prime Broking as defaulter which led N Jayakumar, the promoter of the broking firm to drag NSE to court. In a petition filed in the Bombay High Court, Prime Borking has claimed damages of Rs 95 crore from NSE which they claimed to have lost due to deactivation of UCCs and blocking of pay-outs.

In a separate move, Prime has moved to the Securities Appellate Tribunal (SAT) claiming NSE’s decision to block its pay-out. The cases are scheduled for hearing next week.

“We enabled these UCCs to avoid court cases as long period of deactivation could have forced clients to file further suits against us. Now, SEBI will take a call on the issue,” said the NSE official without divulging on the findings of the investigations.

“While we welcome the move of the NSE to re enable the Unique Client Codes of three Prime Group entities, for purposes of transacting on the exchanges, we continue to press for our financial claims against the NSCCL / NSE, through a suit already filed in the Bombay High Court,” said Prime's Jayakumar.

Choksi, meanwhile, preferred not to comment on the reactivation of his UCC.