SEBI Directs Guest Experts of Zee Business Channel To Cough Up Rs7.41 Crore Illegal Gains
Moneylife Digital Team 09 February 2024
Market regulator Securities and Exchange Board of India (SEBI) has ordered the impounding of Rs7.41 crore unlawful gain earned from fraudulent and unfair activities by guest experts appearing on Zee business channels and their connected entities. The case is related to trading based on the stock recommendations given by these guest experts appearing on Zee business channel. 
In a 127-page order, Kamlesh C Varshney, whole-time member (WTM) of SEBI, says, "...the compelling evidence brought on record, factual analysis and my observations on various aspects of the matter wherein it has been seen as to how certain entities indulged in fraudulent and unfair acts and unlawfully enriched themselves by taking advantage of being in a position to influence innocent investors, I observe that it is a fit case to pass interim directions to insulate the securities market and investors from the mischievous acts of the entities and also to urgently prevent these entities from continuing with their prima facie fraudulent activities while dealing in the securities market. Further, there is an urgency to protect the wrongful gains from getting siphoned off beyond the regulatory reach."
SEBI says 15 entities devised or employed a scheme where guest experts, before making recommendations on Zee Business, communicated such information amongst each other and also with profit-makers in advance. "These profit makers then engaged in executing the first leg of trade just before the recommendation to be aired and then after the recommendation has been aired, close the position with the second leg of transaction, and in the process, the profit makers have earned a profit of Rs7.41 crore during the investigation period." 
Those directed to pay the unlawful gains include Nirmal Kumar Soni, Partha Sarathi Dhar, SAAR Commodities, Manan Sharecom Pvt Ltd and Kanhya Trading Company, Kiran Jadhav, Ashish Kelkar, Himanshu Gupta, Mudit Goyal, and Simi Bhaumik. 
SEBI says Kiran Jadhav, Ashish Kelkar, Himanshu Gupta, Mudit Goyal and Simi Bhaumik were involved in providing trading advice to viewers on the Zee business channel as guest experts. Nirmal Kumar Soni, Partha Sarathi Dhar, SAAR Commodities, Manan Sharecom and Kanhya Trading Company are profit-makers. At the same time, five other entities, Nitin Chhalani, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma, SAAR Securities India Pvt Ltd and Ramawatar Lalchand Chotia are enablers, the market regulator says.
Profit-makers are entities that make profit by executing trades based on advance information of stock recommendations given by guest experts. Enablers aided or assisted profit makers in making profit based on advance information of stock recommendations of guest experts. The third category comprises guest experts who appeared on different shows on the Zee Business and provided or issued stock recommendations.
Considering the prima facie pattern of correlation of trades of suspect entities with recommendations made by guest experts on Zee Business, SEBI conducted a detailed investigation during the period from 1 February 2022 to 31 December 2022. The market regulator also carried out a search and seizure on the premises of Nirmal Kumar Soni, Parth Sarathi Dhar, Manan Sharecom, Kiran Jadhav, Ashish Kelkar, Mudit Goyal and Simi Bhaumik, after obtaining a court order and seized certain electronic devices and statements.
Nirmal Kumar Soni is the authorised signatory and director of Manan Sharecom. Partha Sarathi Dhar and Simi Bhaumik are husband-wife. Rupesh Kumar Matoliya and Ajaykumar Ramakant Sharma are authorised signatories, the director of SAAR Commodities, and the directors of SAAR Securities. Nitin Chhalani is an authorised signatory of Kanhya Trading Company.
According to SEBI, there was an arrangement between Nirmal Kumar Soni and guest experts to share the wrongful gain earned through recommendation-based trades. "The evidence in the form of statement further shows the arrangement entered into amongst profit makers and guest experts that profit earned through recommendation-based trades would be shared among them in terms of the oral agreement."
Mr Varshney, the SEBI WTM observed evidence of market abuse and weakening of market integrity since there is no free and open access to information. He says, "The information is first shared with a select few with an intention to make unlawful gains before being shared in an open manner. Such practices shake investors' confidence in the stock market and interfere in the operation of ordinary market forces of supply and demand, thereby challenging market integrity."
"It is necessary for investors to exercise due diligence while listening to such experts on TV or on social media. There are many orders passed by the SEBI which has highlighted how these platforms are used by some of these experts to implement fraudulent and unfair schemes like front running, pump and dump. Often, many investors become victims of such schemes and have lost money. Hence, investors should exercise due diligence. If any expert promises that this particular scrip or contract will definitely rise and guarantees an assured return in a short time, an immediate question should come to the mind as to why the expert is not using that information quietly to make profits for himself?" the SEBI WTM says.
3 weeks ago
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