Markets regulator SEBI confirmed earlier directions passed against former CNBC Awaaz anchor Hemant Ghai, his wife, and his mother, that barred them from capital markets for indulging in fraudulent trading practices.

In an order passed late on Thursday, SEBI said the findings in the order are “prima facie” and that a detailed investigation in the matter is in progress.

Penalties imposed

In its interim order passed in January, SEBI noted that Hemant Ghai had advance information about the recommendations to be made on the “Stock 20-20” show, co-hosted by him, and he directly or indirectly used it to his advantage.

The show featured recommendations on certain stocks to be bought and sold during the day.

His wife Jaya Hemant Ghai and mother Shyam Mohini Ghai had undertaken a large number of buy-today-sell-tomorrow (BTST) trades during January 2019-May 2020, in synchronization with the recommendations made on the show, SEBI observed.

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They generated the proceeds of ₹2,95,18,680 by carrying out fraudulent trading in respect of recommended stocks.

The individuals were restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever till further directions.

Besides, Hemant was directed to cease and desist from undertaking any activity related to giving investment advice or publishing of research reports related to the securities market, till further directions.

In addition, the capital markets watchdog had directed in the interim order to impound the proceeds of ₹2.95 crore generated by fraudulent trades.

Unfair trade practices

Their conduct was in violation of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.

“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 .... of PFUTP Regulations, stand confirmed,” SEBI said.

Considering their submissions, SEBI said that the submissions /explanations “cannot be accepted.” Thursday’s order came as SEBI considered if the directions issued against the individuals through the interim order need to be confirmed, revoked or modified during the pendency of investigation in the matter, in light of the findings of the interim order and the individuals’ submission.

Following SEBI’s interim order of January 2021, the Network18 Group had terminated Ghai with immediate effect.

CNBC Awaaz is the Hindi business channel of the Network18 Group.