SEBI Bans 10 Entities for Share Rigging on TV Show

SEBI, the market regulator of India, has taken strict action against 10 entities, including market experts, research analysts, and guests appearing on Zee Business, a popular business news channel. The regulator has accused them of indulging in fraudulent and unfair activities by ‘influencing innocent investors’ through their stock recommendations on the channel.

How did they rig the share prices?

According to SEBI’s findings, the guest experts shared their recommendations on stocks or contracts in advance to certain entities before the broadcast on the channel. These entities took positions in the scrip and squared off the position after the broadcast. The profit thus made was shared with the guest experts who had given the recommendations as per a prior understanding between them.

SEBI has estimated the unlawful gains at Rs 7.5 crore, which it has directed to be impounded. The regulator has analysed SMS, WhatsApp and Telegram chats along with bank and other details to gather evidence of the violation.

Who are the entities involved?

The 10 entities that have been barred from the securities market are Kiran Jadhav, Ashish Kelkar, Himanshu Gupta, Mudit Goyal, Simi Bhaumik, Shyam Advisory Pvt Ltd, Shyam Research Pvt Ltd, Shyam Broking Pvt Ltd, Shyam Commodities Pvt Ltd and Shyam Infotech Pvt Ltd.

Some of the guest experts have confirmed that they were sharing recommendations before broadcast and that they had a profit-sharing model in their statements given to Sebi.

What are the consequences of their actions by SEBI?

SEBI has said that such activities are detrimental to the interest of investors and the integrity of the securities market. The regulator has also said that there is a risk of the unlawful gains being siphoned off beyond its reach.

Therefore, SEBI has restricted debit from the bank accounts of the alleged wrongdoers and curtailed redemptions from their mutual fund holdings. However, SEBI has provided 3 months’ time for these entities to close their open positions in the derivatives market.

SEBI has also directed Zee Media Corporation to preserve and maintain all records, documents video records, along with their content, related to the guest experts and concerned shows until the final order is passed.

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