SEBI asks Zee Business guest experts to cough up Rs 7.41 crore

SEBI

Market regulator SEBI in an interim order asked several guest experts appearing on the Zee Business news channel to cough up Rs 7.41 crore “unlawful gain” that they made by taking opposite positions in the market than they advised on air.

Action has been taken against 15 experts appearing on the channel between February 01, 2022 and December 31, 2022.  Some of them were directly involved in taking such unlawful trades, while others enabled them. Some of them have also been barred from trading in the market until further orders, SEBI said in its order on February 8.

They include Simi Bhaumik, Mudit Goyal Himanshu Gupta, Ashish Kelkar, Kiran Jadhav, Ramawatar Lalchand Chotia, SAAR Securities India Private Limited, Ajaykumar Ramakant Sharma, Rupesh Kumar Matoliya, Nitin Chhalani, Kanhya Trading Company, Manan Sharecom Private Limited, SAAR Commodities Private Limited, Partha Sarathi Dhar and Nirmal Kumar Soni.

SEBI categorised them in three categories. Kiran Jadhav, Ashish Kelkar, Himanshu Gupta, Mudit Goyal, and Simi Bhaumik were involved in giving trading advice to viewers, and hence have been bracketed as guest experts. Nirmal Kumar Soni, Partha Sarathi Dhar, SAAR Commodities, Manan Sharecom and Kanhya Trading Company have been termed profit makers and rest are enablers.

The Modus Operandi 

“I note that the Noticees have played specific roles at various stages which have, prima facie, been found to be in violation of the SEBI Act and the regulations made thereunder. Analysis of evidences gathered in the course of investigation reveal that Guest Experts shared advance information pertaining to recommendations to be made by them with Profit Makers, before the broadcast of the recommendations on Zee Business,” said Kamlesh Varshaney, Whole Time Member, SEBI, in his order.

The Profit Makers, having received the information, took position in the scrip/contract and reversed the position or squared off the position upon broadcast of the recommendation on Zee Business, the market regulator said. The profit was then shared with guest experts as per prior understanding.

“I note that the Noticees are jointly and severally liable for impounding of the proceeds generated from the trades which are not in conformity with the provisions of securities laws as mentioned in the below table. Such joint and several liability is restricted amongst those Noticees who made these unfair profits, who enabled certain Noticee to make unfair profits or whose recommendations led to such unfair profits,” Varshaney said.

Need of education

Stating that an urgent decision was required in this case as investors’ education is very important to sensitise them against falling for such experts.

"There are many experts who are spreading financial literacy in India and empowering investors to take their own decisions...the same cannot be said about a few other experts who take advantage of their mass following to make unfair profits by misguiding innocent investors,” SEBI said.

Thus it is important for investors to exercise due diligence before accepting any free flowing advice on TV or social media.

SEBI added that the facts of this case demonstrates a clear scheme of manipulation to harm the interest of investors by misguiding them to take positions in securities so that Profit Makers could make profit at the cost of such investors. Unlawful gains made by these Profit Makers come, directly or indirectly, from the pockets of innocent investors who follow the advice of Guest Experts unaware of the fraudulent scheme, it said.