Sebi Slaps Rs 4 Crore In Fines, Bans Four Entities From Accessing Stock Market In Guest Expert Case

The Securities and Exchange Board of India (Sebi) has slapped a penalty of Rs 4 crore on four entities and barred them from accessing the securities market for a period of two years for making unlawful gains and violating the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) norms. The four entities are Partha Sarathi Dhar, SAAR Commodities Private Ltd, Manan Sharecom Private Ltd and Kanhya Trading Company.

Modus Operandi Deployed By Market Manipulators

Sebi mentioned in its interim order that 15 entities were involved in the fraudulent trading scheme. Five of them, namely Nirmal Kumar Soni, Partha Sarathi Dhar, SAAR Commodities Private Limited, Manan Sharecom Private Limited and Kanhya Trading Company, were profit-makers.

Nitin Chhalani, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma, SAAR Securities India Private Limited and Ramawatar Lalchand Chotia were found to be involved in the scheme as enablers and facilitators. Five guest experts on different business news related shows on the Zee Business channel were found to be involved in the scheme. These included Kiran Jadhav, Ashish Kelkar, Himanshu Gupta, Mudit Goyal and Simi Bhaumik.

The modus operandi deployed by the participants in the fraudulent scheme involved the guest experts going on telecasted shows in which they made stock recommendations. Notably, the guest experts also had a strong social media following and were connected with each other on social media platform X (formerly Twitter). Sebi has said that the guest experts involved in the scheme were aware of their influence on viewers and the impact of the subsequent trades undertaken after watching the recommendations.

“There was significant price movement and change in trading volume in the scrips in line with the broadcasting of the shows in which the recommendations were made,” Sebi said in its order, adding that there was an expectation of an increase in the price and volume traded in the contract after the broadcasts.

Sebi found in its investigation that the entities involved in the scheme devised a strategy to use this influence to move the market in their favour. The guest experts would share the details of the recommendations they were going to make on the shows and the timing of the shows in advance with Nirmal Kumar Soni and Partha Sarathi Dhar.

Soni and Dhar would then place orders in the same scrips through either their own trading accounts or that of SAAR Commodities, Mannan Sharecom Ltd and Kanhya Trading Company before the recommendations were aired on television. Once the recommendations were made and the anticipated surge in prices of the recommended scrips occurred, the trades were squared off resulting in significant profits from selling the stocks at higher prices than they were bought.

Notably Nitin Chhalani, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma, SAAR Securities India Private Ltd and Ramawatar Lalchand Chotia acted as the enablers or facilitators for the fraudulent scheme and gave log-in credentials/ trading accounts/client codes and passwords of broker etc for executing the trades. The unlawful gains made via the strategy were then shared between the profit makers, the guest experts and the enablers.

What Sebi Said In The Final Order

In a settlement order dated January 16, 2025, the proceedings against 10 entities involved in the scheme were settled. As a part of the settlement, 10 entities were debarred from accessing the securities market for a period of six months in terms.

The 10 entities included Nirmal Kumar Soni, Nitin Chhalani, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma, SAAR Securities India Private Limited, Ramawatar Lalchand Chotia, Kiran Jadhav, Ashish Kelkar, Mudit Goyal and Simi Bhaumik. They were also asked to disgorge the unlawful gains of Rs 7,41,29,648 made by them.

In the final order Sebi also said that it could not find supporting evidence to link one of the guest experts namely, Himanshu Gupta to the scheme and thus he was found to not have participated in the fraudulent scheme.

As such, Sebi has slapped penalties only on Partha Sarathi Dhar, SAAR Commodities Private Ltd, Manan Sharecom Private Ltd and Kanhya Trading Company.

They have been asked to pay the penalty amount within 45 days of the order. Partha Sarathi Dhar has been penalised Rs 50 lakh, SAAR Commodities Private Ltd has been penalised Rs 2 crore, while both Manan Sharecom Private Ltd and Kanhya Trading Company have been penalised Rs 75 lakh each.