Madhabi Puri Buch, Whole Time Member, SEBI in an interim order has restrained Hemant Ghai, co-anchor of a television show Stock 20-20 on CNBC Awaaz and his wife and mother from directly or indirectly dealing in securities until further orders. On analysing the trading pattern of Jaya Hemant Ghai and Shyam Mohini Ghai (wife and mother of Hemant Ghai) for the period between January 1, 2019 to May 31, 2020 it was seen that Hemant Ghai in the name of his wife and mother undertook a large number of “Buy-Today-Sell-Tomorrow” trades in synchronisation with the recommendations made in his morning show. Shares were bought on the previous day to the recommendations being made on the Stock 20-20 show and sold immediately on the recommendation day.
In violation of the SEBI Act, 2002 and Prohibition of Fraudulent and Unfair Trade Practices Regulations, 2003 over Rs 100 crore in 90 trades were executed in trading accounts of the two family members which led to gains of approximately 3 crores as per the preliminary investigation. Call data records of Hemant Ghai were also analysed which indicated regular communications with an equity analyst who handled the trades for the account of his wife and mother. Also, there was no data of call records from the registered numbers of his wife and mother to the brokers, therefore it was prima facie inferred that Mr Hemant Ghai was the one handling the transactions.
Also it was noted by SEBI that a discernible increase in price and volume of the recommended scrip on the day of recommendation took place frequently over the course of the relevant period. The preponderance of probability was that a buy recommendation given on the show had a significant positive effect on the price and volume of the scrip.
SEBI passed an ex-parte order to protect the interests of investors and preserve the safety and integrity of the securities market, granting the accused 21 days to file a reply or seek in-person hearings. Besides the bar or trading in securities and the freezing of their bank accounts, SEBI also impounded the banks accounts of the accused to the extent of Rs 2.95 crore. CNBC, the employer of Mr Ghai was also advised to take action against Mr Ghai as per their rules of conduct and to inform readers of the action taken by SEBI.
[In the matter of CNBC Awaaz “Stock 20-20” Show co-hosted by Mr. Hemant Ghai, WTM/MPB/ISD/ 166 /2021]