In the high-profile front running case involving Ketan Parekh and Singapore-based businessman, Rohit Salgaocar, the Securities Appellate Tribunal (SAT) has allowed Rohit Salgaocar to cross-examine Ketan Parekh. SAT has directed Securities and Exchange Board of India (SEBI) to provide a date for Salgaocar to conduct the cross-examination. In its order, SAT said, “Appeal is allowed communication dated August 13, 2025 is set aside. Appellant's request made on 29th July for cross-examination is allowed. SEBI shall intimate the date for cross examination “. The detailed SAT order is awaited.
Rohit Salgaocar had appealed against SEBI’s August communication rejecting his request to cross-examine Parekh. Explaining the need for cross-examination, in pleadings, Salgaocar’s counsel had 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”.
In his plea, Salgaocar 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”.
SEBI maintained that its case did not rely solely on Parekh’s statement, arguing that other material evidence supported the findings. SEBI’s counsel told SAT, “What he says is I have used a statement for drawing adverse inferences but that statement is not exclusive. There are other things also”.
During the hearing, Salgaocar blamed Parekh for the front-running and accused him of “nefarious” activities. His counsel argued, “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”.
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SEBI, however, justified its action against Salgaocar, asserting that he was passing non-public information (NPI) about large client orders to Parekh. The regulator’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 said this led to unfair gains for entities involved in synchronized trading, calling this the “heart of the matter.” It also defended the disgorgement of the Rs 27 crore commission earned by Salgaocar from Motilal and Nuvama, terming it “undue commission”.
Salgaocar’s side countered that scouting counterparties for large orders is a common and accepted market practice carried out with client’s awareness.
SEBI’s interim order
In its interim order dated January 3, 2025, SEBI accused Salgaocar of benefiting from advance knowledge of large trade orders and barred him, Parekh, and others from trading. The order stated that NPI about impending large client orders in various scrips was passed by Salgaocar to Parekh, who then directed other noticees to place trades through front-running accounts to profit from the expected price movements. SEBI had ordered disgorgement of Rs 65.77 crore from Salgaocar, Ketan Parekh and others. Rest of the parties have already deposited Rs 38.70 crore and around Rs 27 crore is still to be recovered as per SEBI’s interim order.
Ketan Parekh has challenged the recovery before the Bombay High Court while seeking permission to travel abroad, after the special SEBI court imposed a condition requiring him to deposit the amount in order to travel. Parekh’s counsel in High Court put the liability on Salgaocar. The High Court later struck down the condition of deposit of Rs 27 crore and allowed Parekh to travel abroad after a security deposit of Rs 5 lakh.
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