In the high-profile front-running case that shocked the market after revelations that Ketan Parekh was active again, Singapore-based businessman Rohit Salgaocar has accused Parekh of “nefarious” activities. The matter was listed for hearing today before the Securities Appellate Tribunal (SAT). The tribunal briefly heard both sides and scheduled the matter for further hearing tomorrow. Salgaocar had filed plea before SAT, after Securities and Exchange Board of India (SEBI) rejected his request to cross examine Ketan Parekh. Salgaocar said that SEBI has relied to build a case against him based on Ketan Parekh’s statement and hence it is required to cross examine Ketan Parekh.
The counsel appearing for the Rohit Salgaocar said, “I didn't know that behind my back while saying that he has got this all big-ticket clients and all he was himself taking those positions and doing all these front running activities”.
On the rationale for cross examining Ketan Parekh, Salgaocar’s counsel argued, " In the statement which Ketan Parekh has given before SEBI, therein he makes certain statements and which have this potential of implicating me, that I, knew that all these people those who are here in India these 6-7 entities they were taking those positions”.
However, SEBI countered by stating that its findings were not based solely on Parekh’s statement. SEBI’s counsel argued, “What he says is I have used a statement for drawing adverse inferences but that statement is not exclusive. There are other things also”.
Salgaocar’s plea in SAT, said “Once the statement has formed part of the evidentiary record and has been adverted to in the show-cause proceedings, the Appellant is entitled to test its veracity by cross-examination. Denial of this right vitiates the proceedings”.
Salgaocar explained that he used to receive mandates from large global funds for buying and selling shares, and for this purpose he regularly scouted for counterparties. In this context, he came into contact with Ketan Parekh around 2021–22. Salgaocar claimed he approached Parekh because Parekh represented that he was “well connected” in the securities market and had strong relationships with various fund houses. According to him, Parekh claimed he had the bandwidth to provide counterparties interested in large block trades. It was in this backdrop, Salgaocar said, that he interacted with him.
SEBI side justified the reason for passing the order against Rohit Salgaocar, saying he was passing the details of non-public information of shares to be bought and sold on behalf of big clients. SEBI’s counsel argued that, “these leakages were happening because Rohit Salgaonkar was divulging NPI, about the impending orders of the big client in various scrips to Ketan Parekh for executing the fraudulent scheme”. SEBI side further argued that, this resulted in unfair gains to the entities linked in this scheme of synchronized trading. SEBI side called this ‘heart of the matter’. SEBI side also justified the disgorgement of the Rs 27 crore commissions earned by Rohit Salgaocar from broking firms Motilal and Nuvama and called it ‘undue commission’.
The Salgaocar side defended the practice, arguing that in cases involving large orders, counterparties are often scouted with the knowledge and approval of the big clients. His counsel stated, “Nobody had kind of pointed out any fingers and this is quite normal practice for the purposes of scouting around for counter parties”. Salgaocar side justified approaching Ketan Parekh and said, there was no tradiing embargo on him at that point in time and his debarment period had got over, as he is still very well connected in the market. Salgaocar’s petition also says that SEBI’s interim order has damaged his reputation and is threatening his livelihood. Moneycontriol had reported first that, Rohit Salgaocar has moved SAT to cross examine Ketan Parekh.
SEBIs interim order
In its interim order dated January 3, 2025, SEBI accused Salgaocar of benefitting from advance knowledge of large trade orders and barred him from trading along with Ketan Parekh and others. The order stated that NPI regarding impending orders of the big client in various scrips was communicated by Salgaocar to Parekh. Thereafter, Parekh instructed other Noticees to place trades through the accounts of front runners to take positions and profit from the impending large client orders.
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