The Securities & Exchange Board of India (SEBI) has passed an order confirming the interim directions against former CNBC Awaaz anchor Hemant Ghai, his wife and mother wherein the regulator had debarred the three from the securities market for fraudulent trading activities.
The interim order directed Ghai to cease and desist from undertaking, directly or indirectly, any activity related to giving investment advice, till further advice and the bank accounts of the entities to the extent of over Rs 2.95 crore was impounded.
It was the amount earned through trading during the concerned period of January 1, 2019 to May 31, 2020.
The said entities were directed to open an escrow account with a nationalised bank, jointly or severally and deposit the impounded amount.
Ghai was the co-host of the show ‘Stock 20-20’ which recommended certain stocks to be bought during the day with a target price and a stop loss price. Based on KYC details from Motilal Oswal Financial Services, Kotak Securities, Ohm Stock Brokers and ICICI Securities, and bank statement of Kotak Mahindra Bank (Jaya Hemant Ghai), it was found that the notices were involved in fraudulent trade practices.
On an analysis of trades executed in the trading accounts of Jaya Hemant Ghai and Shyam Mohini Ghai, it was observed that buy positions were created by placing orders in the trading account of the entities in the respective scrips one day prior to the recommendations being given on the show co-hosted by Hemant Ghai.
These buy positions have been exited by selling the said shares, on the recommendation day at a price higher than at which the shares were bought just a day before, thereby generating significant proceeds.
Such trades were executed repeatedly in the trading accounts of Jaya Hemant Ghai and Shyam Mohini Ghai, synchronised with the recommendations given on the show co-hosted by Hemant Ghai.
According the market regulator, it was prima facie noted that the recommendation in the show to buy the scrip had a significant impact on the price, particularly opening price, and volume of the scrip as there was no other material price sensitive corporate announcement supporting the significant price and volume variation in the scrip on the day of the recommendation or the prior day.
This prima facie, discernable increase in price and volume of the recommended scrip on the day of recommendation has taken place frequently over the course of the relevant period of January 1, 2019 to May 31, 2020.