Market regulator Securities and Exchange Board of India (SEBI) on Wednesday restrained CNBC Awaaz anchor Hemant Ghai, his wife and mother from accessing stock exchange over charges of fraudulent trading. Ghai hosts the “Stock 20-20” show on the channel. The regulator said that Ghai had the “advance information about the advice to be made on the show which he directly/indirectly used it to his advantage”.
In order to guard the interests of the investors and therefore the integrity of the stock exchange , SEBI has restrained Hemant Ghai and his wife Jaya Hemant Ghai and mother Shyam Mohini Ghai from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever till further directions. additionally , he has been directed to cease and desist from undertaking any activity associated with giving investment advice, publishing of research reports associated with the stock exchange , till further directions.
The bank accounts of Hemant Ghai and his family have also been frozen for debit till further orders.
“If the aforesaid entities have any open positions in any exchange traded derivative contracts, as on the date of the order, they will close out/ settle such open positions within 3 months from the date of order or at the expiry of such contracts, whichever is earlier. The aforesaid entities are permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this order,” SEBI said in an interim order.
Hemant Ghai shall cease and desist from undertaking, directly or indirectly, any activity associated with giving investment advice, sell or buy recommendations, publishing of research reports etc., associated with the stock exchange , till further directions,” it added.
Besides, Hemant Ghai and his family are directed to supply a full inventory of all assets held in their name, jointly or severally, whether movable or immovable, or any interest or investment or charge on any of such assets, including details of all bank accounts, demat accounts and open-end fund investments, immediately but not later than 5 working days from the date of receipt of this order.
They have been also been directed to not eliminate any assets, whether movable or immovable, or any interest or investment or charge on any of such assets, held in their name, jointly or separately, including money lying in bank accounts, except with the prior permission of SEBI until the impounded amount is deposited within the escrow.
The depositories, registrar and transfer agents have also been directed to make sure that till further directions, no credits are made within the demat accounts of the entities, held jointly or solely.
SEBI said that the above directions shall become immediately and shall be effective until further orders. a replica of this order are going to be served upon all recognised stock exchanges, depositories, banks, registrar and share transfer agents to make sure compliance with the above directions.
“CNBC TV 18 is additionally advised to appropriately bring back the notice of the viewers of the shows co-hosted by Hemant Ghai that SEBI has passed an interim order against him for clear violations of SEBI (Prohibition of Fraudulent and Unfair Trade Practices concerning Securities Market) Regulations, 2003,” the order noted.
Sebi, clear , found that Hemant along side his wife Jaya Hemant Ghai and mother Shyam Mohini Ghai employed a scheme to conduct fraudulent or unfair trading supported the advance information concerning recommendations to be made within the show stock-20-20.
On analysis of the trading pattern within the trading account of Jaya Hemant Ghai and Shyam Mohini Ghai for the amount between January 1, 2019, and should 31, 2020, high correlation of their trades was observed with the stocks recommended within the show. It thereby generated the proceeds of Rs 2.95 crore by completing fraudulent trading in respect of recommended stocks.
The regulator found that shares were consistently purchased within the trading accounts of Hemant Ghai’s wife and mother, at some point before the day of advice on the show.
To capture the many benefits from the worth movement caused by the recommendations on the show, they then sold their shares as soon because the market opened on the day of the advice and consequently, earned profits and perpetrated a fraud upon the market and therefore the viewers of the show, it added.
Hemant was clear using the trading accounts of his wife and mother. Besides, Jaya Hemant Ghai and Shyam Mohini Ghai also are responsible for the violations, associated with the trades done/facilitated in their accounts by him.