Tips or Tip-Offs? SEBI Alleges Zee Business Guest Experts Shared Stock Market Tips Before Broadcast; Settles with 10 Entities, Bars 4 and Clears 1

The Securities and Exchange Board of India (SEBI) recently passed an order, barring four entities from participating in the securities market and confirmed settlement recoveries of ₹7.41 crore with 10 others in a case involving pre-broadcast dissemination of stock market tips by guest experts appearing on Zee Business television channel.

SEBI had undertaken the action following an extensive investigation into suspected misuse of advance stock recommendations between February and December 2022.

Know How to Investigate Books of Accounts and Other Documents, Click Here

Following a probe, SEBI was of the opinion that select guest experts allegedly disclosed their upcoming stock tips before their scheduled TV appearances. These tips were passed to a network of traders, who would acquire those stocks just before the recommendations aired.

The trades were typically squared off shortly after the TV broadcast, with the traders with the pre-emptive info being able to capitalize on the post-recommendation price surge.

The market regulator classified 15 individuals and entities involved into three categories, being - Profit Makers, Enablers and Guest Experts.

Profit Makers included Partha Sarathi Dhar, SAAR Commodities Private Limited, Manan Sharecom Private Limited and Kanhya Trading Company, who executed trades based on advance tips and earned disproportionate gains.

Enablers such as Nirmal Kumar Soni, Nitin Chhalani, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma, Ramawatar Lalchand Chotia and SAAR Securities India Pvt. Ltd. were deemed to have aided in facilitating these trades by providing trading access, accounts or related support.

Guest Experts such as Kiran Jadhav, Ashish Kelkar, Mudit Goyal and Simi Bhaumik were found to have shared stock recommendations on the Zee Business channel in advance of their on-air appearances.

SEBI issued an interim order in February 2024, impounding ₹7.41 crore from all 15 parties involved and also froze their bank and demat accounts.

While 10 of the entities opted to settle the proceedings without admitting guilt, they agreed to disgorge their alleged gains and face a six-month market ban. These included the aforementioned guest experts, enablers, and one profit-maker.

However, the remaining four profit-makers Partha Sarathi Dhar, SAAR Commodities Pvt. Ltd., Manan Sharecom Pvt. Ltd. and Kanhya Trading Company chose not to settle the matter. SEBI found the above four guilty of violating provisions of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, fining each of them between ₹50 lakh and ₹2 crore.

Additionally, all four entities were barred from accessing the securities market for a period of two years from the date of the interim order.

Meanwhile, proceedings against guest expert Himanshu Gupta were closed as SEBI found insufficient evidence to link him directly to any unlawful trades that were conducted following the broadcast. Although there were circumstantial links that leaned towards the allegations, they did not meet the threshold required for punitive action.

The final order was signed by Whole Time Member of the SEBI, Amarjeet Singh.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates