An AD INTERIM EX PARTE impounding order passed against the noticees for violation of SEBI regulation –  THE  SECURITIES AND EXCHANGE BOARD OF INDIA
An AD INTERIM EX PARTE impounding order passed against the noticees for violation of SEBI regulation –  THE  SECURITIES AND EXCHANGE BOARD OF INDIA A preliminary examination was conducted by SEBI into trading activities of certain entities and found violations in provisions of Securities and Exchange Board of India Act, 1992 and various regulations frames under SEBI regulations,2003 the investigation was done on the fact that  high correlation of the trades of the aforesaid entities was observed with the  recommendations furnished in the show Stock 20-20 aired on news channel CNBC Awaaz and in light of these findings proceedings was conducted under ANANTA BARUA (WHOLE TIME MEMBER) an interim ex parte order was issued by SEBI against the noticee and the replies of the noticees were heard and a “Confirmatory Order” was passed In the confirmatory order a detailed investigation was undertaken in the matter by SEBI. The detailed investigation covered all the stock recommendations made on all televised shows hosted/co-hosted by Noticee on the channel on the Intraday trades day and further investigation was conducted to check whether there was any violations in PFUTP Regulations, 2003 and SEBI Act, 1992 by noticee   the conclusion of the investigation forming part of various allegations was issued to noticee through show cause notice and it was observed that noticee has made wrongful gains off Rs. 4,51,88,459.07/-and Rs. 1,63,28,675.02/-, respectively, as a result of the impugned trades and the officer, find it necessary to take urgent steps for impounding the remaining proceeds of wrongful gains made by the Noticees through impugned trades, by way of an ex parte ad interim measure, under Sections 11(1), 11(4) and 11B (1) of the SEBI Act, 1992 and direction relating to the order was attached with the order issued to noticee.
Ad Interim Ex Parte Impounding Order in the matter of trading activities of Hemant Ghai & Ors. WTM AB IVD ID3 20 2021 22 SECURITIES AND EXCHANGE BOARD OF INDIA AD INTERIM EX PARTE IMPOUNDING ORDER Under Sections 11111111Band 11 Bof the Securities and Exchange Board of India Act 1992 In respect of: 1. 2. 3. Name of the Entity Mr. Hemant Ghai Ms. Jaya Hemant Ghai Ms. Shyam Mohini Ghai The aforesaid entities are hereinafter individually referred to by their respective names noticee numbers and collectively as “the Noticees”. In the matter of Trading Activities of Family Members of Hemant Ghai 1. Securities and Exchange Board of Indiaconducted a preliminary examination into the trading pattern of certain entities for the period between January 1 2019 to May 31 2020 to look into possible violations of provisions of the Securities and Exchange Board of India Act 1992and various regulations framed thereunder including SEBI Regulations 2003 hereinafter referred to as “PFUTP Regulations 2003”) based on the fact that high correlation of trades of the aforesaid entities was observed with Ad Interim Ex Parte Impounding Order in the matter of trading activities of Hemant Ghai & Ors. recommendations furnished in the show Stock 20 20 aired on news channel CNBC Awaaz. In light of the aforesaid findings of the examination an interim ex parte order dated January 13 2021was passed by SEBI against the Noticees by which inter alia bank accounts of the Noticees were impounded for Rs. 2 95 18 690 was passed by SEBI confirming the directions issued vide the Interim Order. 3. As noted in the Confirmatory Order a detailed investigation was undertaken in the matter by SEBI. The detailed investigation covered all the stock recommendations made on all televised shows hosted co hosted by Mr. Hemant Ghai and the BTST and Intraday trades undertaken to trade ahead of such recommendations for a period of 3 years preceding the date of the Interim Order. SEBI conducted the aforesaid detailed investigation to ascertain whether there was any violation of the provisions of the PFUTP Regulations 2003 and SEBI Act 1992 by Mr. Hemant Ghai Ms. Jaya Hemant Ghai and Ms. Shyam Mohini Ghai during the period from January 1 2018 to January 13 2021. 4. Upon conclusion of the investigation in the matter the relevant extract of the findings of investigation forming part of the allegations against each of the Noticees shall be contained in the show cause notice which is being separately issued to the Noticees herein. 5. The findings of the investigation has also brought out enhanced quantum of wrongful gains as under: Entity trading in Total Unlawful gainsdisgorgement of profit jointly and Ad Interim Ex Parte Impounding Order in the matter of trading activities of Hemant Ghai & Ors. shows hosted co hosted by Hemant Ghai on CNBC s provided on shows hosted co hosted Hemant Ghai on CNBC Awaaz Jaya Hemant Shyam Mohini Hemant Ghai 4 51 88 459.07 Jaya Hemant Ghai and Hemant Ghai Hemant Ghai 1 63 28 675.02 Shyam Mohini Ghai Jaya Hemant Ghai and Hemant Ghai 6. From the above it is observed that Ms. Jaya Hemant Ghai and Ms. Shyam Mohini Ghai have made wrongful gains of Rs. 4 51 88 459.07 and Rs. 1 63 28 675.02 respectively as a result of the impugned trades. While a sum of Rs. 2 95 18 690 has already been impounded vide Interim Order dated January 13 2021. However detailed investigation reveals that total wrongful gains made by the Noticees was Rs. 6 15 17 134 is not impounded immediately it may ultimately pose a hindrance in the effective implementation of direction of disgorgement and or imposition of monetary penalty if any to be issued on disposal of the SCN which is being separately issued to the Noticees. Therefore I note that it is necessary for SEBI to take urgent steps for impounding the remaining proceeds of wrongful gains made by the Noticees through impugned trades by way of an ex parte ad interim measure under Sections 11(1) 11(4) and 11Bof the SEBI Act 1992 the details of which are as hereunder: Ad Interim Ex Parte Impounding Order in the matter of trading activities of Hemant Ghai & Ors. gainsAmount already impounded4 51 88 459.07 1 63 28 675.02 2 95 18 680 3 19 98 454 whom amount is to be impounded Hemant Ghai Jaya Hemant Ghai and Entities Liable Jaya Hemant Ghai and Hemant Shyam Mohini Ghai and Hemant DIRECTIONS: In view of the foregoing I in exercise of the powers conferred upon me in terms of Section 19 read with Sections 11(1) 11(4)(d) 11(4A) 11Band 11Bof the SEBI Act hereby issue the following directions: A sum of Rs. 3 90 67 921 being the unlawful gains along with interest is impounded jointly and severally from the Noticees as mentioned in the table below: Entities Liable Jaya Hemant Ghai and Hemant Shyam Mohini Ghai and Hemant gainsAmount already impoundedamountAmount to be 4 51 88 459.07 1 63 28 675.02 2 95 18 680 3 19 98 454 70 69 467 3 90 67 921 Rate of interest for the calculation of interest is 12% p.a. simple interest. Period of interest for the alleged gains made is March 31 2020to January 31 2022. The above mentioned amount shall remain impounded till disposal of the SCN being issued and shall be subject to the directions issued in the final order while disposing of such SCN. The aforesaid amount shall be kept in an escrow account as detailed inbelow. A lien shall be marked in the Escrow Account s in favour of SEBI and the monies kept therein shall not be released without the permission Ad Interim Ex Parte Impounding Order in the matter of trading activities of Hemant Ghai & Ors. of SEBI. The banks where Noticees i.e. Mr. Hemant Ghai Ms. Jaya Hemant Ghai and Ms. Shyam Mohini Ghai are holding accounts are directed that no debits shall be made without the permission of SEBI in the said bank accounts. Further the depositories are also directed that no debit shall be made without the permission of SEBI in respect of the demat accounts held by the said Noticees. However credits if any into the said bank and demat accounts may be allowed. The banks and the depositories are directed to ensure that all the above directions are strictly enforced. Further debits may also be allowed for amounts available in the account in excess of the amount impounded. Banks are allowed to debit the accounts for the purpose of complying with this order. On production of proof by any of the Noticees that the said money has been deposited in the Escrow Account SEBI shall communicate to the Banks and Depositories to defreeze the The Registrar and Transfer Agents are also directed to ensure that till further directions except for compliance of direction at para 8above the securities units held in the name of Noticees mentioned at para 8 above jointly or severally are not transferred redeemed. The Noticees mentioned in the table in para 8are also directed not to dispose of or alienate any of their assets properties securities except for compliance of direction at para 8above till such time the amount mentioned in para 8is credited to an Escrow Account created specifically for the purpose in a Nationalized Bank. Ad Interim Ex Parte Impounding Order in the matter of trading activities of Hemant Ghai & Ors. 9. This Order comes into force with immediate effect and shall remain in force till order to be passed on conclusion of SCN proceedings.s. 10. This Order shall be served on all Recognized Stock Exchanges Depositories Registrar and Share Transfer Agents and Banks to ensure necessary compliance. Place: Mumbai ANANTA BARUA Date: February 03 2022 WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA 