Securities and Exchange Board of India (SEBI): Madhabi Puri Buch, Whole Time Member, while affirming the interim order, rejected all the submission of the Noticees, on the ground that they have prima facie employed a fraudulent scheme to execute the impugned trades, resulting in the prima facie contravention of the provisions of Section 12A (b) of SEBI Act and regulations 3 (c) and (d) and 4(1) of PFUTP Regulations

In the instant matter the Noticees, Hemant Ghai, Jaya Hemant Ghai (wife) and Shyam Mohini Ghai (mother) it was alleged that the Noticees had prima facie indulged in unfair trade practice and have prima facie employed a fraudulent scheme to execute the impugned trades, resulting in the prima facie contravention of the provisions of Section 12A (b) of SEBI Act and regulations 3 (c) and (d) and 4(1) of PFUTP Regulations, stand confirmed. Hemant Ghai was hosting the show, Stock 20-20, wherein recommendations on certain stocks to be bought/sold during the day, were made. It was observed that Jaya Hemant Ghai (spouse) and Shyam Mohini Ghai (mother) had undertaken a large number of Buy-Today-Sell-Tomorrow trades during the Relevant Period in synchronization with the recommendations made in the Show. Shares were bought on the previous day to the recommendations being made on the Show and sold immediately on the recommendation day. The earned proceeds were amounting to Rs 2,95,18,680/- through the limited number of trades examined during the Relevant Period.

The Noticee made many submissions, for instance, the trades in the accounts of Jaya Ghai and Shyam Mohini Ghai were an attempt to avoid regulatory surveillance or code of conduct, that the recommendations made in the course of each episode of the Show during the Relevant Period has not been considered, and they were not provided with any report of the investigation conducted by SEBI, and had denied that the impugned trades were synchronized with the recommendations in the Show, further that the concept of lending of trading accounts is not recognized by SEBI Act or the Rules and Regulations framed thereunder, were all rejected with sound reasons by the Tribunal one by one.

The Tribunal while confirming the interim order, held that the prima facie findings in the interim order dated January 13, 2021, that Mr Hemant Ghai, Ms Jaya Hemant Ghai and Ms Shyam Mohini Ghai have prima facie indulged in unfair trade practice and have prima facie employed a fraudulent scheme to execute the impugned trades, resulting in the prima facie contravention of the provisions of Section 12A (b) of SEBI Act and regulations 3 (c) and (d) and 4(1) of PFUTP Regulations, stand confirmed.[CNBC Awaaz “Stock 20-20” Show co-hosted by Mr Hemant Ghai, In re, WTM/MB/ISD/13305/2021-22, decided on 02-09-2021]


Agatha Shukla, Editorial Assistant has reported this brief.

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