The Securities and Exchange Board of India today barred CNBC Awaaz anchor Hemant Ghai and two of his family members from the capital markets. Ghai was also directed to "cease and desist" from giving investment advice and recommendations related to the securities market.
Ghai is the co-host of the show "Stock 20-20" on the channel; the show recommends "buy-today-sell-tomorrow" stocks to its viewers.
SEBI's directions were made in an interim order issued today.
The order applies to Ghai, his wife Jaya Hemant Ghai, and his mother Shyam Mohini Ghai. The bank accounts of all three have also been frozen for debit transactions. They have also been directed to provide a full inventory of both moveable and immoveable assets held in their name, whether jointly or severally.
According to the order, Ghai's wife and mother would engage in "buy-today-sell-tomorrow" trades in "synchronisation" with recommendations made on Ghai's show. This would happen a day before the show aired, and then sold immediately on the day the show aired, the order said.
Based on an analysis of the trading patterns of Ghai's wife and mother, SEBI said it had conducted a "preliminary examination" for the period ranging between January 1, 2019 and May 31, 2020 for "possible violations" of, among other things, the Securities and Exchange Board of India Act and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations.
SEBI discovered that the trades executed in Jaya and Shyam Mohini's accounts were prima facie in violation of provisions of the Act and Regulations. The family "pocketed nearly Rs 3 crore" in the process, Business Standard reported.
While a detailed investigation is yet to take the place, SEBI said there is "ample prima facie evidence which demonstrates that the conduct of the entities is unfair which has prima facie violated the integrity of the market”. This has the potential to cause “irreparable injury to the securities market”.
It said the Ghais' "modus operandi" was "designed to take unfair advantage of the advance information of the buy recommendation to be given on the show co-hosted by Mr Hemant Ghai".
SEBI also advised CNBC Awaaz to bring the interim order to the notice of its viewers.
