15 January 2021

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Explained Why SEBI Banned Hemant Ghai, wife and mother for fraudulent trading

Explained Why SEBI Banned Hemant Ghai, wife and mother for fraudulent trading
Friday, January 15, 2021

The Securities and Exchange Board of India (Sebi) banned CNBC Awaaz show host Hemant Ghai, his wife Jaya Ghai and mother Shyam Mohini Ghai from the capital market for alleged fraudulent trading practices.

SEBI has restrained Hemant Ghai, host of various shows on Hindi business television channel CNBC-Awaaz, from buying, selling or dealing in the securities market. Besides the bar or trading in securities and the freezing of their bank accounts, SEBI has also impounded the banks accounts of the Ghais to the extent of Rs 2.95 crore—the value of gains made by them.

Hemant Ghai is employed with CNBC-TV18, the regulator has directed the CNBC-TV18 to notify its viewers that an interim order has been passed against Ghai.

Hemant Ghai has also been directed to cease and desist from giving any investment advice or stock recommendations till further directions. His bank accounts and those of two family members have been frozen.

Hemant Ghai used to host a show called Stock 20-20 aired on the Hindi business television channel CNBC-Awaaz channel at 7.20 am, Monday to Friday. He also hosted other shows like Munafe Ki Taiyari Pehla Sauda and Kamai Ka Adda.

SEBI examined call data records of Hemant Ghai which indicated regular communications with an equity analyst of MAS Consultancy, an authorized person of Motilal Oswal Financial Services Ltd.
The SEBI examined the KYC details and trading records of Ghai’s mother and wife, along with the list of stocks recommended in the morning show, trading volume and the price change in such shares before and on the day of recommendation.

Explained How the fraud was committed by Hemant Ghai and Family?

SEBI’s order deals with the show Stock 20-20. 

Hemant Ghai had the advance information about the recommendation to be made on the "stock 20-20" show

The show Stock 20-20 “features recommendations on certain stocks to be bought/sold during the day”. Basically, trading accounts of Ghai’s mother, Shyam Mohini, and his wife, Jaya, were used to buy stocks a day before he would recommend them on Stock 20-20. The stocks would then be sold on the day of recommendation. The demand for the stock recommended pushed up its price.

CNBC Awaaz Viewers were buying the stocks and on the same time Hemant Ghai was selling the stocks, this is how Ghai was fooling, cheating everyone.

once the stock price rose after his recommendation, his broker, MAS Consultancy in Mehsana, an authorized entity of Motilal Oswal Financial Services, sold the stock.

The SEBI order points out that Ghai made a profit of Rs 2.95 crore “just through the limited number of trades examined during the relevant period”.

SEBI order points out: “Based on call data records, it is observed that Mr. Hemant Ghai was in regular communication with Mr. Parth Anilkumar Raval (equity research/equity analyst at MAS Consultancy...over the course of the relevant period.”

As the order points out: “It is prima facie observed that Mr. Hemant Ghai was in effect in control of the trading accounts of Ms Jaya Hemant Ghai and Ms Shyam Mohini Ghai.

Shares were bought on the previous day and sold immediately on the day when a recommendation was made on the show, SEBI’s order has pointed out. 

SEBI found more than 80% co-relation between trades executed by the Ghais on the stock exchanges and the recommendations given on the morning show. 

The recommendation made on the show would result in a significant positive effect on the price and the volume of the company’s shares.

In certain instances, the change in the price of the recommended scrip on the next day was as high as 9%.

The regulator has arrived at a prima facie conclusion that the over Rs 100 crore in 90 trades executed in trading accounts of the two family members between January 2019 to May last year led to gains of more than Rs 2.95 crore. This is a violation of the SEBI Act and Prohibition of Fraudulent and Unfair Trade Practices regulations, the order stated.

Now SEBI needs to frame the laws which will fix the responsibility of such business channels otherwise Hemant Ghai will go and someone else will do the same until he is exposed.

Lesson learned is never trust anyone, do your homework, understand the company and its business and then buy the shares. 

Hemant Ghai Photo –

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Friday, January 15, 2021

Tags – Hemant Ghai Wife Jaya Ghai mother Shyam Mohini Ghai SEBI Ban CNBC Awaaz show