In a first of its kind order, the Securities and Exchange Board of India (SEBI) on Wednesday barred CNBC Awaaz anchor Hemant Ghai, his wife and mother from the capital markets for indulging in fraudulent trading practices.
Following the order, the Network18 Group terminated Ghai with immediate effect. CNBC Awaaz tweeted, "Network 18 group has terminated with immediate effect Hemant Ghai, a show host and anchor of our Hindi business channel CNBC Awaaz." His termination is a consequence of an interim ex-partner order by the Sebi against Ghai for prima facie violations of PFUTP norms, it noted. CNBC Awaaz is the Hindi business channel of the Network18 Group.
Soon after SEBI barred CNBC Awaaz anchor Hemant Ghai and his family from the capital markets, netizens took to Twitter to express their opinion about the news anchor indulging in fraudulent trading practices.
One user said: "What the hell, channel should be punished great work by SEBI. Should set an example for punishing such culprits #SEBI#CNBCAwaaz."
While another user said: "Hemant Ghai's fraud is not like a Harshad Mehta or a Ketan Parikh one, who operated on their own. Hemant used a channel of repute to fraud and swindle innocent citizens. How can the penalty be restricted to him only? Even the channel need to be punished! @SEBI_India #CNBCAwaaz."
Here's what netizens had to say:
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, Sebi said in an interim order.
The show features recommendations on certain stocks to be bought and sold during the day.
In addition, he has been 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, Sebi noted.
Further, the capital markets watchdog has directed to impound the proceeds of Rs 2.95 crore generated by fraudulent trades.
Sebi, prima facie, found that Hemant along with his wife Jaya Hemant Ghai and mother Shyam Mohini Ghai employed a scheme to conduct fraudulent or unfair trading based on the advance information pertaining to recommendations to be made in the show 'Stock-20-20'.
On analysis of the trading pattern in the trading account of Jaya Hemant Ghai and Shyam Mohini Ghai for the period between January 1, 2019, and May 31, 2020, high correlation of their trades was observed with the stocks recommended in the show.
They thereby generated the proceeds of Rs 2.95 crore by carrying out fraudulent trading in respect of recommended stocks.
The regulator found that shares were consistently purchased in the trading accounts of Hemant's wife and mother one day prior to the day of recommendation on the show.
To capture the significant benefits from the price movement caused by the recommendations on the show, they then sold their shares as soon as the market opened on the day of the recommendation and consequently, earned profits and perpetrated a fraud upon the market and the viewers of the show, it added.
Hemant was prima facie using the trading accounts of his wife and mother. Besides, Jaya Hemant Ghai and Shyam Mohini Ghai are also liable for the violations, related to the trades done/facilitated in their accounts by him.
Through such activities, they violated the provisions of Sebi's PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) Regulations.
Accordingly, these individuals have been "restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever till further directions".
(Inputs from PTI)