On February 8, 2024, the Securities and Exchange Board of India (SEBI) issued a significant order targeting 15 guest experts who appeared on Zee Business Channel, implicating them in unlawful trading activities based on the stock recommendations they provided on-air. These experts were found to have engaged in deceptive practices by taking positions in the market that were opposite to their public recommendations, thereby making unlawful gains. The total amount involved in these illicit activities was identified to be Rs 7.41 crore.
SEBI’s investigation revealed that these actions took place between February 1, 2022, and December 31, 2022. The regulatory body’s findings indicated that some of these guest experts were directly involved in the trades, while others facilitated these activities. As a consequence, SEBI has barred some individuals from trading until further notice. Moreover, the entity emphasized the importance of investor education, advising investors to exercise due diligence before accepting any advice from television or social media platforms. The motive behind SEBI’s stringent action is to protect investors from manipulation schemes orchestrated by unscrupulous market participants.
In addition to the fines, SEBI has imposed restrictions on the implicated entities, prohibiting them from buying, selling, or dealing in securities directly or indirectly until further orders are issued. This move underscores SEBI’s commitment to maintaining the integrity of the securities market and safeguarding investor interests. The list of those penalized includes a mix of individuals and corporate entities, demonstrating a clear scheme of manipulation aimed at profiting at the expense of innocent investors. SEBI’s order is part of a broader investigation into the correlation between the trading activities of certain entities and the stock recommendations made by guest experts on Zee Business, which also involved search and seizure operations to gather evidence.
This case is a stark reminder of the regulatory oversight that exists in the financial markets and the serious consequences of engaging in manipulative and deceptive practices. SEBI’s actions serve not only as a punitive measure but also as a deterrent to prevent similar occurrences in the future, thereby ensuring a more transparent and fair marketplace for all participants.
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WTM/KCV/ISD/ISD-SEC-6/30020/2023-24
BEFORE THE SECURITIES AND EXCHANGE BOARD OF INDIA
CORAM: KAMLESH C. VARSHNEY, WHOLE TIME MEMBER
INTERIM ORDER CUM SHOW CAUSE NOTICE
Under the provisions of Sections 11(1), 11(4), 11(4A),11B(1) and 11B(2) of the
Securities and Exchange Board of India Act, 1992
In respect of:
| Sl. No. | Name of Noticees | PAN |
| 1. | Nirmal Kumar Soni | BCHPS4866G |
| 2. | Partha Sarathi Dhar | ASCPD8155H |
| 3. | SAAR Commodities Private Limited (SAAR Commodities) | AAJCS7343G |
| 4. | Manan Sharecom Private Limited | AAPCM9816L |
| 5. | Kanhya Trading Company | AAXFK5345H |
| 6. | Nitin Chhalani | CDLPC3829F |
| 7. | Rupesh Kumar Matoliya | AFRPM8024J |
| 8. | Ajaykumar Ramakant Sharma | AZJPS8694Q |
| 9. | SAAR Securities India Private Limited (“SAAR Securities”) | AAKCS2154C |
| 10. | Ramawatar Lalchand Chotia | ADIPC7123K |
| 11. | Kiran Jadhav | ACBPJ4456A |
| 12. | Ashish Kelkar | ACAPK0708P |
| 13. | Himanshu Gupta | AISPG3320M |
| 14. | Mudit Goyal | AMLPG9294K |
| 15. | Simi Bhaumik | AHPPB7419L |
In the matter of trading based on the stock recommendations given by Guest Experts appearing on Zee Business Channel
(The entities mentioned above are individually known by their respective names or Noticee No. and collectively referred to as “Noticees”; unless the context specifies otherwise)
TABLE OF CONTENTS
|
Particulars |
Paragraph Nos. | Page Nos. | |
| A. | Background | 1 – 4 | 3 – 5 |
| B. | Details of Noticees | 5-8 | 5 – 7 |
| C. | Key evidences collected during the investigation | 9-10 | 7-8 |
| D. | Connection amongst Noticees | 11-20 | 8 – 27 |
| E. | Sharing of information in advance about stock recommendations by Guest Experts and trades carried out by Profit Makers based on such advance information | 21-81 | 27 – 65 |
| F. | Increase in trade volume as well as positive movement of price in line with the direction of the recommendation | 82 – 115 | 66 – 79 |
| G. | Role of Enablers | 116 – 117 | 79-81 |
| H. | Summary of profit on intraday trade based on advance information of recommendation | 118-131 | 81-92 |
| . | Sharing of profits amongst Noticees | 132-141 | 92-100 |
| I. | Determination of facts | 142 – 143 | 100 – 103 |
| J. | Examination of violation of provisions of SEBI Act and regulations made thereunder | 144 – 164 | 103- 117 |
| K. | Need for interim ex-parte order | 165 – 172 | 117 – 120 |
| L. | Joint and several liability | 173 – 174 | 120 – 122 |
| M. | Ex parte interim order | 175 – 183 | 123 – 127 |
A. Background
1. The present proceedings are emanating from an investigation conducted by the Securities and Exchange Board of India (hereinafter referred to as “SEBI”), to examine high correlation between the trading activities of Noticees Nos. 1 to 5 and the stock recommendations given by Noticees Nos. 11 to 15, who were guest experts featuring in different shows broadcasted on the television channel Zee Business (hereinafter referred to as “Zee Business”), during the period starting from February 01, 2022 and ending with December 31, 2022 (both days inclusive) (hereinafter referred to as “Relevant Period/ Investigation Period”). Investigation was also conducted to examine the role of Noticees Nos. 6 to 10 who were allegedly associated/ connected with the Noticee No. 1, through Noticees Nos. 3 and 5, who allegedly aided and abetted Noticees in their trading activities having correlation with the recommendation given by guest experts during the relevant period.
2. Considering the prima facie pattern of correlation of trades of suspect entities with recommendations made by guest experts on Zee Business, further investigation was undertaken in order to gather evidence of possible violation of the provision of the Securities and Exchange Board of India Act 1992 (hereinafter referred to as the “SEBI Act”), and the Regulations framed thereunder including, Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as the “PFUTP Regulations”) and Securities and Exchange Board of India (Research Analysts) Regulations, 2014 (hereinafter referred to as the “RA Regulations”).
3. An Investigation Authority under Section 11C of the SEBI Act was appointed by the Competent Authority to carry out further investigation in the matter. Subsequently, a search and seizure operation was carried out on the premises of suspect entities (i.e. Nirmal Kumar Soni, Parth Sarathi Dhar, Manan Sharecom Private Limited, Kiran Jadhav, Ashish Kelkar, Mudit Goyal and Simi Bhaumik) after obtaining a Court order. During the said operation, certain electronic devices were seized and statements were recorded under oath.
4. During post-search investigation, inter alia, following steps were undertaken, namely:-
a) Analysis of data contained in electronic devices seized during search and seizure operation;
b) Analysis of KYC details and bank account statements of Noticees;
c) Analysis of Client Application Forms (CAF) provided by Telecom Service Providers (TSP);
d) Analysis of Call Data Records (CDR) of Noticees;
e) Analysis of Geographical locations of Noticees during certain periods;
f) Analysis of trading activities of Noticees;
g) Analysis of recorded videos of shows provided by Zee Media Corporation Limited (“ZMCL”);
h) Analysis of Account Opening Forms (AOF) provided by banks; and
i) Analysis of relevant material available on Ministry of Corporate Affairs (MCA) website.
B. Details of Noticees
5. In order to have a better understanding of the matter and the role played by suspected entities, Noticees have been divided into three categories as per immediately succeeding paragraphs.
6. First category- Profit Makers
The first category is “Profit Makers” which comprises of entities that made profit by executing trades which were allegedly executed based on advance information of stock recommendations given by guest experts. In the extant matter, Nirmal Kumar Soni (Noticee No. 1), Partha Sarathi Dhar (Noticee No. 2), SAAR Commodities Private Limited (Noticee No. 3/ SAAR Commodities), Manan Sharecom Private Limited (Noticee No. 4) and Kanhya Trading Company (Noticee No. 5/Kanhya) have been referred to as “Profit Makers”.
7. Second category- Enablers
The second category comprises of entities that allegedly aided/assisted Profit Makers in making profit based on advance information of stock recommendations of guest experts. This category of entities allegedly provided necessary support/credentials viz. trading accounts/ trading terminals, login IDs and passwords etc., for aiding and abetting Noticee No. 1 to execute trades in the accounts of Noticees Nos. 1, 3, 4 and 5. Accordingly, Nitin Chhalani (Noticee No. 6), Rupesh Kumar Matoliya (Noticee No. 7), Ajaykumar Ramakant Sharma (Noticee No. 8), SAAR Securities India Private Limited (Noticee No. 9/ SAAR Securities), Ramawatar Lalchand Chotia (Noticee No. 10), who were related and associated with Noticee Nos. 3 and 5, have been referred to as “Enablers”.
8. Third category- Guest Experts
The third category comprises of guest experts who appeared on different shows on the Zee Business and provided/issued stock recommendations to viewers of this Channel. It is pertinent to mention here that these experts have significant presence in social media. In the extant matter, Kiran Jadhav (Noticee No. 11), Ashish Kelkar (Noticee No. 12), Himanshu Gupta (Noticee No. 13), Mudit Goyal (Noticee No. 14) and Simi Bhaumik (Noticee No. 15) have been referred to as “Guest Experts”. Guest Experts have allegedly provided non-public information to certain entities (Profit Makers) prior to broadcasting of their recommendations. Brief introduction of these Guest Experts (as ascertained during the investigation) is provided below-
a) Mr. Kiran Jadhav (Noticee No. 11), a SEBI Registered Research Analyst, appeared on shows broadcasted on Zee Business and provided stock recommendations under the tagline “KIRAN KA KAMAL”. As per the website of Kiran Jadhav & Associates, he is a Promoter, CMD, and Mentor at Kiran Jadhav & Associates, Pune, which primarily is a stock market training company. He has trained over 12,000 individuals in the field of Technical Analysis of shares. It is seen that he had a social media presence with over 1,40,000 followers on “X” (erstwhile Twitter) during the investigation period.
b) Mr. Ashish Kelkar (Noticee No. 12), a Co-Promoter and CEO at Kiran Jadhav & Associates, appeared on shows broadcasted on Zee Business and provided stock recommendations under the tagline “KIRAN KA KAMAL”. As per the website of Kiran Jadhav & Associates, he has trained over 14,000 individuals in the field of technical analysis of shares.
c) Mr. Himanshu Gupta (Noticee No. 13) is a research professional and Senior Vice President (Research) at Globe Capital Market Limited (as per the website of this company). He provided stock recommendations under the tagline “HITMAN HIMANSHU” on shows broadcasted on Zee Business. It is seen that he had over 15,700 followers on “X” (erstwhile Twitter) during the investigation period.
d) Mr. Mudit Goyal (Noticee No. 14) is a SEBI registered Research Analyst at present (not at the time during the investigation period). He provided stock recommendations under the tagline “MUDIT KE MUNAFE” on shows broadcasted on Zee Business. It is seen that he had a following of over 25,300 followers on “X” (erstwhile Twitter) during the investigation period.
e) Ms. Simi Bhaumik (Noticee No. 15) is a SEBI registered Research Analyst. She provided stock recommendations under the tagline “SIMI KE NON STOP SHARES” on shows broadcasted on Zee Business. It is seen that while acting as a Research Analyst, she also operated various subscription-based models through which she offered exclusive stock recommendations to her subscribers. Further, it is seen that she had a following of over 26,000 followers on “X” (erstwhile Twitter) during the investigation period.
The analysis of video recordings of broadcasted shows provided by ZMCL revealed that appearance of aforementioned Guest Experts on Zee Business was not restricted to any specific show/time and these Guest Experts appeared on Zee Business throughout the day under their respective taglines.
C. Key evidences collected during the investigation
9. For the purpose of this order, following evidences have been collected, namely:-
(a) Evidence of connection amongst various Noticees;
(b) Evidence of sharing of advance information about scrip/contract recommendations by Guest Experts with Profit Makers prior to the appearance of these experts on Zee Businesss;
(c) Evidence of trades having carried out by Profit Makers based on such advance information;
(d) Evidence of increase in trade volumes as well as favourable movement of price in line with recommendations, creating opportunities for Profit Makers to make profits based on such advance information; and
(e) Evidence of sharing of profit by Profit Makers with Guest Experts.
10. These evidences are discussed in succeeding paragraphs to arrive at finding of facts. Subsequently it is examined whether these facts lead to prima facie finding on violation of SEBI Act as well as regulations made there under.
D. Connection amongst Noticees
11. In order to examine connection amongst Noticees, various materials on record have been examined/analysed. During search and seizure, mobile phones of the below mentioned Noticees were also seized. On examination/analysis, the following details with respect to mobile numbers of the Noticees have been gathered –
Table No. 1
|
Mobile |
Registered in
the name of / Used by |
Source |
| 773XXXX742
931XXXX971 |
Nirmal Kumar Soni (Noticee No.1) | Client Application Form received from Telephone Service Provider (TSP); |
| Account Opening Forms (AOF) provided by Bank;
Statement recording of Nirmal Kumar Soni; At the time of search & seizure operation, Nirmal Kumar Soni was having possession of a mobile phone with the SIM card of this number |
–
|
842XXXX686 |
Partha Sarathi Dhar (Noticee No. 2) | Client Application Forms received from TSP;
AOF provided by Bank; Statement recorded dated January 19, 2023 |
| 982XXXX688 | SAAR
Commodities (Noticee No.3) |
KYC details provided by Bank |
| 773XXXX742 | Manan Sharecom Pvt Ltd. (Noticee No.4) | AOF provided by Bank |
| 977XXXX111 | Kanhya Trading Company (Noticee No.5) | AOF provided by Bank |
| 977XXXX111 | Nitin Chhalani (Noticee No.6) | Client Application Form received from TSP |
| 981XXXX506 | Rupesh Kumar Matoliya
(Noticee No.7) |
Client Application Form received from TSP |
| 981XXXX056 | Ajaykumar Ramakant Sharma (Noticee No.8) | Client Application Form received from TSP |
| 981XXXX506 | SAAR Securities (Noticee No.9) | KYC details provided by Bank |
| 982XXXX678 | Ramawatar Lalchand Chotia (Noticee No.10) | Client Application Form received from TSP |
| 982XXXX880 | Kiran Jadhav (Noticee No.11) | Client Application Form received from TSP; Statement recording dated January 19, 2023 |
| 988XXXX277 | Ashish Kelkar (Noticee No.12) | Client Application Form received from TSP Statement recording dated January 19, 2023 |
| 844XXXX469 | Himanshu Gupta (Noticee No.13) | Client Application Form received from TSP Statement recording dated January 19, 2023 |
| 925XXXX511 | Mudit Goyal (Noticee No.14) | Client Application Form received from TSP Statement recording dated January 19, 2023 |
| 983XXXX790 974XXXX790 | Simi Bhaumik (Noticee No.15) | Client Application Form received from TSP Statement recording dated January 19, 2023 |
12. Further, based on the material/information collected from MCA website, etc., AOF/ KYC details received from banks, CAF received from TSP etc., preliminary connection amongst the Noticees have been observed as below-
12.1. Nirmal Kumar Soni (Noticee No. 1) is designated as the Authorized Signatory and a Director of Manan Sharecom Private Limited (Noticee No. 4) as per the AOF of Manan Sharecom Private Limited provided by HDFC Bank. Further, the mobile number registered in the HDFC bank account of Noticee No. 4, is “7730000742”, which is registered in the name of Nirmal Kumar Soni, as per the information provided by the TSP.
12.2. Partha Sarathi Dhar (Noticee No. 2) and Simi Bhaumik (Noticee No. 15) have common address. As per KYC of Simi Bhaumik’s account provided by Indian Bank, Partha Sarathi Dhar is mentioned as her husband. Similarly, as per KYC of Partha Sarathi Dhar’s account provided by Indian Overseas Bank, Simi Bhaumik is mentioned as his wife.
12.3. As per AOF provided by Axis bank, Rupesh Kumar Matoliya (Noticee No. 7) and Ajaykumar Ramakant Sharma (Noticee No. 8) are Authorized Signatories and Directors of SAAR Commodities Private Limited (Noticee No. 3). Further, Rupesh Kumar Matoliya (Noticee No. 7) and Ajaykumar Ramakant Sharma (Noticee No. 8) are common Directors in both SAAR Commodities (Noticee No. 3) and SAAR Securities (Noticee No. 9). It is also noted that all trades of SAAR Commodities (Client Code SC100) were executed through the trading member SAAR Securities.
12.4. As per the AOF of Kanhya Trading Company (Noticee No. 5) provided by HDFC Bank, mobile number “9770000111” is linked with its bank account and Nitin Chhalani (Noticee No. 6) is listed as one of its Authorised Signatories. Further, as per AOF of Nitin Chhalani provided by HDFC Bank, same mobile number “9770000111” is also associated with bank account of Nitin Chhalani.
13. From the examination of CDR and various records including Whatsapp/ Telegram Chats retrieved from seized devices of Noticees and statements of bank accounts, further connections amongst Noticees have emerged which are discussed in immediately succeeding paragraphs.
14. Connection amongst Nirmal Kumar Soni, Kiran Jadhav and Ashish Kelkar
a. The relevant CDRs/ Whatsapp chats/Telegram chats pertaining to the investigation period have been analysed and it is observed that Nirmal Kumar Soni (773XXXX742) had calls/Whatsapp chats/ Telegram chats with both Kiran Jadhav (982XXXX880) and Ashish Kelkar (988XXXX277). It is also observed from the said Whatsapp chats that Nirmal Kumar Soni had met Kiran Jadhav in Pune (December 24, 2022) and in Dubai(2022). The said fact is also corroborated by the Whatsapp chats/photos retrieved from the gallery of phone seized during the search and seizure. Further, during the statement recording on January 19, 2023 of Kiran Jadhav, the following was inter alia stated by him:
“52. From 2021, how many times Soni has met you and in which locations?
Ans: Thrice in Poona, once in Jaipur and once in Dubai (whole trip was sponsored by Nirmal Soni). Apart from the above locations I haven’t met them.”
b. On analysis of Telegram chats between Ashish Kelkar (988XXXX277) and Kiran Jadhav (982XXXX880) dated April 18, 2022, it is noted that Nirmal Kumar Soni had visited both Kiran Jadhav and Ashish Kelkar in Pune on April 18, 2022. Further, Nirmal Kumar Soni, vide Telegram chat dated April 28, 2022, had shared e-visa (of Ashish Kelkar) and vide chat dated May 06, 2022, he had shared hotel booking details (for Kiran Jadhav). From Nirmal Kumar Soni’s phone gallery, photos of a trip to Dubai have been retrieved in which he was accompanied by Ashish Kelkar, Kiran Jadhav and Nitin Chhalani.
c. Investigation also revealed that Nirmal Kumar Soni possessed another number (931XXXX971) through which he communicated with Rutvik Jadhav (772XXXX688), who is the son of Kiran Jadhav.
d. Based on the above, association of Nirmal Kumar Soni, Kiran Jadhav and Ashish Kelkar is depicted in the following chart –
Illustration No. 1
15. Connection between Nirmal Kumar Soni and Simi Bhaumik
a. The CDRs of Nirmal Kumar Soni (773XXXX742) and Simi Bhaumik (974XXXX790 and 983XXXX790) have been analysed and it is observed that Nirmal Kumar Soni had exchanged SMS with Simi Bhaumik during the investigation period.
b. Further, from analysis of geographical locations of meeting points, it is observed that Nirmal Kumar Soni and Simi Bhaumik had met in Kolkata on multiple occasions. The geographical location of meeting points for one such day i.e. August 06, 2022 is illustrated below:
Illustration No. 2
c. It is also observed that there were multiple Whatsapp calls between mobile number of Simi Bhaumik (974XXXX790) and mobile number (931XXX971) which was saved and recorded/termed as “Vikash Parasar’ in the mobile phone of Simi Bhaumik. In her statement recorded on January 19, 2023, Simi Bhaumik claimed that the said number is belonging to “Vikash Parasar’. However, during search and seizure, the mobile phone having the sim for the aforesaid mobile number (931XXXX971) was found to be in possession of Nirmal Kumar Soni. Additionally, Nirmal Kumar Soni, in his statement recorded on January 19, 2023, confirmed that the mobile number 931XXXX971 belonged to him. The ownership of the said mobile number was also found to be in the name of Nirmal Kumar Soni and the same got corroborated with CAF provided by the TSP.
d. From the above, it can be inferred that Simi Bhaumik and Nirmal Kumar Soni were connected to each other during the relevant period. Further, the number 931XXXX971 (termed as “Vikash Parasar” in the mobile phone of Simi Bhaumik) was in actuality being used by/registered in the name of Nirmal Kumar Soni and the same number was also being used to interact with each other. Thus, for the purposes of this order, Vikash Parasar is to be seen as another name for Nirmal Kumar Soni.
e. Thus, it can be seen that Nirmal Kumar Soni is connected to Simi Bhaumik.
16. Connection between Nirmal Kumar Soni and Kanhya Trading Company/ Nitin Chhalani.
a. The CDRs pertaining to the relevant period were analysed and it is observed that Nirmal Kumar Soni (773XXXX742) had communicated frequently with Nitin Chhalani (977XXXX111) over calls during the relevant period.
b. The various chats (as recovered from phone) shared between them have been analysed and it is observed that in one of the Whatsapp chats dated May 17, 2022, Nitin Chhalani had requested Nirmal Kumar Soni to get the password reset for MXX96 (which is short for Client Code N_1XX81_MXX96 that is associated with Kanhya Trading Company), and the same was done by Nirmal Kumar Soni. The screenshot of the said whatsapp has been illustrated below:
Illustration No. 3
c. It is observed that the client code was provided by the Stock Broker- Motisons Shares Pvt. Ltd. where Nirmal Kumar Soni used to work till July 2022, as inter alia mentioned in his statement recorded on January 19, 2023.
d. It is also observed that vide WhatsApp chat dated July 05, 2022, Nitin Chhalani had asked Nirmal Kumar Soni to execute trades in the account of Kanhaya Trading Company held with Motisons Shares Private Limited. Further, it is observed from the multiple WhatsApp chats exchanged between them, that they both had shared passwords of different accounts with each other.
e. Analysis of the bank accounts shows that an amount of INR 85 Lakh was transferred from Kanhya Trading Company’s bank account (HDFC A/c no. 50XXXXXXXXXX70) to Nirmal Kumar Soni’s bank account (HDFC A/c no. 50XXXXXXXXXX61) between November 21, 2022 and November 24, 2022. An amount of INR 10 Lakh was seen to be transferred from Nirmal Kumar Soni’s account to Kanhya Trading Company’s account on November 30, 2022. The illustrated fund flow is depicted in the chart below-
Illustration No. 4
f. In view of the above, it can be seen that Nirmal Kumar Soni is connected with Nitin Chhalani and Kanhya Trading Company based on Whatsapp chats and fund transfers. It can also be seen that Nirmal Kumar Soni had access to the Login credentials (client code and password) of accounts of Kanhya Trading Company. The Connection of Nirmal Kumar Soni with Kanhya Trading Company/Nitin Chhalani is depicted below:
Illustration No. 5
17. Connection amongst Nirmal Kumar Soni, SAAR Commodities Private Limited and SAAR Securities India Private Limited
a. SAAR Securities India Private Limited (Noticee No. 9) served as the trading member of SAAR Commodities Private Limited (Noticee No.3).
b. Noticees Nos. 3 and 9 shared common directors (Rupesh Kumar Matoliya (Noticee No. 7) and Ajaykumar Ramakant Sharma (Noticee No.8) during the investigation period. Further, Ramawatar Lalchand Chotia (Noticee No. 10) was also a Director and Authorized Signatory of Noticee No. 9 during the relevant period.
c. Nirmal Kumar Soni had frequently communicated with Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma and Ramawatar Lalchand Chotia during the investigation period. Nirmal Kumar Soni also met with Ramawatar L. Chotia on multiple occasions in Mumbai and Jaipur, as seen from the analysis of geographical locations of mobile phones determined from the cell phone towers. Some of the illustrations of their meetings in Jaipur and Mumbai are provided below-
Illustration No. 6
Illustration No. 7
d. The mobile number of Ramawatar Lalchand Chotia was saved as “Ram Sharma SAAR” in the mobile phone of Nirmal Kumar Soni. In one of the Whatsapp chats dated December 07, 2022 between Nimal Kumar Soni and Ramawatar Lalchand Chotia, it is observed that Ramawatar Lalchand Chotia requested Nirmal to square off open positions in the Client code SC100. This Client Code SC100 is of SAAR Commodities with SAAR Securities as the trading member. The screenshot of the above conversation is depicted below;
Illustration No. 8
e. In another Whatsapp chat dated December 10, 2022, Ramawatar Lalchand Chotia is seen to have instructed Nirmal Kumar Soni to transfer a specific sum to the bank account of SAAR Commodities for 1-2 days due to margin-related issues and the screenshot of the same is depicted herein.
Illustration No. 9
f. On analysis of Whatsapp chats of Nirmal Kumar Soni (773XXXX742), it is observed that on July 22, 2022, Nirmal Kumar Soni had received a User ID (25630) and corresponding password from one Mohammed Kammal Anwar (724XXXX882), whose name was saved as “SAAR IT” on his (Nirmal Kumar Soni) phone. Vide other Whatsapp chats, “SAAR IT” had shared comprehensive list of User IDs with Nirmal Kumar Soni for his review. Nirmal Kumar Soni also requested the said person to configure the aforementioned ID on his desktop using remote desktop software. As per email dated October 06, 2023 sent by NSE, Mr. Mohammed Kammal Anwar is identified as an employee of SAAR Securities who was responsible for IT related work. Further, it is observed that the User IDs mentioned in the Whatsapp chats belonged to NEAT Terminals of SAAR Securities India Private Limited which is the trading member of SAAR Commodities. The said fact is corroborated with the email dated September 04, 2022 sent by NSE. Some of the Whatsapp chats mentioning NEAT Terminal IDs and passwords are illustrated below-
Illustration No. 10
–
g. At this point, it is pertinent to note that manual dealer orders are placed on NSE trading system through NEAT Terminal or CTCL Terminal. For NEAT terminal, trading members are required to provide the details of device to map the IP addresses at the time of registration so as to have the validity and authentication of trades. Further analysis of the details pertaining to NEAT Terminals of SAAR Securities for placing dealer orders on NSE trading system, shows that the registered address for 14 terminals of SAAR Securities matched with the registered office address of Manan Sharecom Pvt. Ltd. The same address is also mentioned in the Panchnama dated January 19, 2023 for Nirmal Kumar Soni. The details of the said 14 NEAT terminals as provided by NSE vide email dated September 04, 2022, are mentioned below-
Table No. 2
|
MEM BER _CO DE |
USE R_ID | SE GM ENT | DEALER_NAME | PAN NO | Add res s |
| 12856 | 25967 | CM | Harsh Niraj Ruparelia | BXVPR624 9B |
208, EVERSHINE TOWER 2ND, AMRAPALI CIRCLE VAISHALI NAGAR, JAIPUR, RAJAST HAN 302021 |
| 12856 | 16656 | FO | Vikash Shrivastava | BXCPS8836E | |
| 12856 | 17132 | FO | Vimalkumar Ramcharan Sharma | BOCPS2404F | |
| 12856 | 17147 | FO | Rakesh Shankarlal Sharma | BLLPS6414H | |
| 12856 | 16612 | FO | Vikram Jangid | AFXPJ7083C | |
| 12856 | 18567 | FO | Chandrakala Ramawatar Sharma | AJLPS4480N | |
| 12856 | 19386 | FO | Narendra Kumar | EGAPK0043R | |
| 12856 | 44656 | FO | Lokesh Kumar Solanki | CIUPS3262C | |
| 12856 | 49662 | FO | Uddesh Sharma | NMXPS336 0H | |
| 12856 | 49663 | FO | Phool Singh | CHGPS1033Q | |
| 12856 | 17133 | FO | Rohit Prajapat | COEPP2884K | |
| 12856 | 49659 | FO | Vijay Verma | AFHPV5573K | |
| 12856 | 49660 | FO | Hemaraj Sharma | HKAPS1424M | |
| 12856 | 49661 | FO | Parsan Jeet Pal | BLMPP2439N |
h. Upon analyzing the bank statements of Nirmal Kumar Soni (HDFC account –50XXXXXXXXXX61) and SAAR Securities (Axis account-21XXXXXXXXXX12), it is observed that a total sum of INR 3.15 Lakh was transferred from SAAR Securities’ account to Nirmal Kumar Soni’s account between October 17, 2022 and December 06, 2022.
i. From the above narration of facts, it can be inferred that SAAR Securities and SAAR Commodities are associate/connected entities having common Directors i.e. Rupesh Kumar Matoliya (Noticee No. 7) and Ajaykumar Ramakant Sharma (Noticee No.8). Further, Ramawatar Lalchand Chotia, who is a Director of SAAR Securities, was communicating with Nirmal Kumar Soni regarding margin issues and transfer of funds to the account of SAAR Commodities. This further shows that Ramawatar Lalchand Chotia was aware about trades being executed by the Noticee No. 1, in the accounts of Noticee No. 3.
j. Further, it is seen that Nirmal Kumar Soni was requested by Ramawatar Lalchand Chotia (Noticee No. 10 and Director of SAAR Securities) to square off the positions in “SC100” which is the Client Code of SAAR Commodities with SAAR Securities. It can be inferred that the details of the trading account of SAAR Commodities was already available with Nirmal Kumar Soni.
k. Further, Ramawatar Lalchand Chotia, being a Director of SAAR Securities, had requested Nirmal Kumar Soni to transfer funds to the bank account of SAAR Commodities for 1-2 days due to margin-related issues. Additionally, the details of the NEAT Terminals of SAAR Securities was shared with Nirmal Kumar Soni and the remote desktop software was also installed in the computer of Nirmal Kumar Soni, by an employee of SAAR Securities (Noticee No. 9).
l. Based on the above evidences of connection of Nirmal Kumar Soni with Ramawatar Lalchand Chotia, Rupesh Kumar Matoliya, Ajaykumar Ramakant Sharma and SAAR Securities, it can be seen that knowingly information regarding trading account of SAAR Commodities and NEAT Terminals of SAAR Securities was provided to Nirmal Kumar Soni. It can also be seen that Nirmal Kumar Soni had access to the trading account of SAAR Commodities for executing trades.
m. Thus, it can be seen that Noticees Nos. 7, 8, 9 and 10, by accommodating Nirmal Kumar Soni, facilitated, aided and abetted him in executing trades in the account of SAAR Commodities Limited.
n. The connection amongst Nirmal Kumar Soni, SAAR Commodities Private Limited and SAAR Securities India Private Limited is illustrated below-
Illustration No. 11
18. Connection amongst Guest Experts: CDRs of phone numbers belonging to/used by the Guest Experts have been analysed along with Whatsapp/Telegram chats from seized devices and the key observations of the analysis are as below:
a. Analysis of CDRs indicates frequent calls between the phone numbers 988XXXX277 (registered in the name of Ashish Kelkar) and 772XXXX688 (registered in the name of Rutvik Jadhav, son of Kiran Jadhav). Further, CDRs also shows calls between the numbers 931XXX971 (registered in the name of Nirmal Kumar Soni) and 772XXXX688 (registered in the name of Rutvik Jadhav, son of Kiran Jadhav).
b. There were frequent calls amongst Ashish Kelkar (988XXXX277), Himanshu Gupta (844XXXX469) and Mudit Goyal (925XXX511) throughout the investigation period.
c. It is observed that Mudit Goyal (925XXXX511) had contacted Himanshu Gupta (844XXXX469) over calls during the investigation period. Further, it is observed from the Whatsapp chats between Ashish Kelkar and Kiran Jadhav that Himanshu Gupta and Mudit Goyal had visited them in Pune. In view of the said discussion, it can be seen that, Kiran Jadhav, Ashish Kelkar, Himanshu Gupta and Mudit Goyal are connected to each other.
d. The analysis of CDRs also shows that Simi Bhaumik (983XXXX790) communicated with Kiran Jadhav (982XXXX880) and Mudit Goyal(925XXXX511) over phone calls. It can be seen that Simi Bhaumik is connected to Kiran Jadhav and Mudit Goyal.
e. Thus, it can be seen that the Guest Experts have frequently communicated with each other during the investigation period.
19. In view of the above discussion, it is seen that-
a. Ashish is connected to Kiran Jadhav, Himanshu Gupta and Mudit Goyal through calls based on CDR;
b. Simi Bhaumik is connected to Mudit Goyal and Kiran Jadhav through calls based on CDR;
c. Mudit Goyal and Himanshu Gupta are also connected through calls based from CDR and they both have also visited Kiran Jadhav and Ashish Kelkar in Pune.
20. Based on above it is seen that there are evidences which demonstrates connections amongst Noticees. The connection running through the three sets of entities i.e. Noticees can be depicted as per the following illustration.
Illustration No. 12
E. Sharing of information in advance about stock recommendation by Guest Experts and trades carried out by Profit Makers based on such advance information.
21. Having seen connection amongst Noticees, I now proceed to take note of evidence of direct/indirect sharing of non-public information regarding recommendations, by Guest Experts to Profit Makers in advance. Thereafter, it needs to be seen whether the said non-public advance information was used for taking positions in scrip/contract in the trading account of Noticee Nos. 1 to 5 (Profit Makers) and whether they were squared off immediately after the said recommendations were broadcasted.
22. Based on analysis of the available records, many instances of sharing of advance information by Guest Experts to Profit Makers, and subsequent trading based on such information, have been observed. Details of such trades are being provided separately. However, some of these instances are being discussed in the immediately succeeding paragraphs.
E.1. Sharing of advance information between Simi Bhaumik and Partha Sarathi Dhar followed with trade by Partha Sarathi Dhar and Nirmal Kumar Soni (Manan Sharecom Private Limited)
23. It is observed from the available records that on August 25, 2022, Simi Bhaumik recommended ‘Buy’ for BALRAMPUR CHINI’ on Zee Business. The evidence in the form of video recording obtained from the said news channel shows that the recommendation “BALRAMPUR CHINI” appeared on the screen at around 10:42AM. The screenshot below depicts such recommendation.
Screenshot no. 1
24. On analysis of the Whatsapp chats shared between Simi Bhaumik (974XXXX790) and Partha Sarathi Dhar (974XXX921), it is seen that the Guest Expert Simi Bhaumik had shared information about her recommendation to buy ‘BALRAMPUR CHINI’ at 10:21 AM, in advance, with Partha Sarathi Dhar. Same can be seen from the screenshot below-
Screenshot no. 2
25. An analysis of the trades executed by Partha Sarathi Dhar on August 25, 2022, showed the following:
Table No. 3
DATE |
SYMBOL |
INSTR-UME NT TYPE |
BUY QUANTI TY |
BUY
|
BUY ORDE R STAR T TIME |
SELL QUANTI TY |
SELL
|
SELL ORDE R STAR T TIME |
Rec o Tim e |
25/08/22 |
BALRAMC
|
FUTSTK |
33,600 |
1,21,27,120.00 |
10:35:24 |
33,600 |
1,22,30,400 .00 |
10:41:56 |
10:41:00 |
26. From the above, it is seen that Partha Sarathi Dhar had advance information of the recommendation to be made by his wife Simi Bhaumik on Zee Business. The above screenshot shows that Simi Bhaumik had shared her recommendations with Partha Sarathi Dhar before recommending the same on Zee Business. Thus, she facilitated Partha Sarathi Dhar to take a position or execute trade based on such advance information of recommendation being broadcasted. The above screenshot also shows that Simi Bhaumik, apart from sharing the non-public information pertaining to her recommendation, also used to share details of recommendation of other Guest Expert as the screenshot of Whatsapp chat also talks about the recommendation of another Guest Expert Mudit Goyal being shared by Simi Bhaumik with her husband Parth Sarathi Dhar.
27. Further, it has already been seen in the earlier part of this order that Partha Sarathi Dhar is husband of Simi Bhaumik (Para 12.2) and there is connection between Simi Bhaumik and Nirmal Kumar Soni (Director and Authorised Signatory of Manan Sharecom Private Limited) (para 15). From the materials gathered in the course of investigation, it has also been seen that Nirmal Kumar Soni is also trading in the option contracts of “BALRAMPUR CHINI”, in the account of Manan Sharecom Private Limited (Noticee No. 4, where Noticee No. 1 Nirmal Kumar Soni is a Director and Authorised Signatory).
28. The summary of trading activity of Partha Sarathi Dhar and Manan Sharecom Private Limited in the contract BALRAMPUR CHINI SEP Futures and BALRAMPUR CHINI 360 CE, based on advance information from Simi Bhaumik is as follows:
Table No. 4
|
Entity Name |
Partha Sarathi Dhar | Manan Sharecom Private Limited |
||
| PAN | (ASCPD8155H) | (AAPCM9816L) | ||
| Contract Name | BALRAMPUR CHINI SEP Futures |
BALRAMPUR CHINI 360 CE | ||
| Expiry Date | September 29, 2022 | |||
| Trade Leg | First leg of Trade |
Second leg of Trade |
First leg of Trade |
Second leg of Trade |
| Buy | Sell | Buy | Sell | |
| Date | August 25, 2022 | |||
| Order Start Time | 10:35:24 AM | 10:41:56 AM | 10:39:47 AM | 10:41:35 AM |
| Order End Time | 10:39:53 AM | 10:41:56 AM | 10:39:56 AM | 10:44:13 AM |
| Trade Start Time | 10:35:28 AM | 10:42:14 AM | 10:39:47 AM | 10:42:12 AM |
| Trade End Time | 10:39:53 AM | 10:42:15 AM | 10:39:57 AM | 10:44:14 AM |
| Average Price | 360.93 | 364.00 | 21.60 | 23.21 |
| Traded Quantity | 33,600 | 33,600 | 1,08,800 | 1,08,800 |
| Total Value Traded (₹) | 1,21,27,120 | 1,22,30,400 | 23,50,000 | 25,25,360 |
| Client Traded Val to Market Val | 0.44% | 2.65% | ||
| Client Traded Val in the select security vis-à-vis all securities in the market | 25.61% | 7.20% | ||
| Profit | 1,03,280 | 1,75,360 | ||
29. From the above it is observed that both Partha Sarathi Dhar and Manan Sharecom initiated their Buy orders at 10:35:24 Hrs and 10:39:47 Hrs, respectively, just before broadcasting of the recommendation on Zee Business at around 10:42 AM. Further, the sell orders were placed by Partha Sarathi Dhar at 10:41:56 Hrs and by Manan Sharecom between 10:41:35 Hrs and 10:44:13 Hrs i.e. around the time when the relevant recommendation was being aired on the news channel. An immediate question that may come up in mind may be about the sell order start time being just before the public announcement of the recommendation by Simi Bhaumik. In this respect, it is noticed that the aforementioned Noticees have placed limit sell orders. That means when they saw Simi Bhaumik on the channel they knew about the impending recommendation and also knew that once recommendation is made, share price would go up. Hence, they placed limit sell order at higher price which got executed after the recommendation was made and price rose following the recommendation. Thus, as per the calculation on table above, profit amounting to INR 1,03,280 was made by Partha Sarathi Dhar and amounting to INR 1,75,360 was made by Manan Sharecom, based on advance information of the recommendation to be made by Simi Bhaumik..
E.2. Sharing of advance information between Mudit Goyal and Partha Sarathi Dhar via Simi Bhaumik and subsequent trade by Partha Sarathi Dhar
30. From the materials available on record, it is observed that on May 13, 2022, Mudit Goyal had recommended “Coromandel 900 CE” on Zee Business at 12:46 PM. On May 20, 2022, he had also recommended “SBILife 1080 CE” at 12:48 PM. The same are illustrated below-
Screenshot no. 3
–
31. From the Whatsapp chats retrieved from the mobile phone of Simi Bhaumik (974XXXX790), it is observed that Mudit Goyal (925XXXX511) had shared his above recommendations for Coromandel 900 CE with Simi Bhaumik at 12:36 PM on May 13, 2022 and for SBILife 1080 CE at 12:35 PM on May 20, 2022. The Whatsapp chats exchanged between Simi Bhaumik and Mudit Goyal are shown below-
Screenshot no. 4
–
32. For the purpose of assessing whether the above information was just a sharing of information between Guest Experts in the ordinary course of their business of giving stock recommendations or the same was used for some other purposes, an analysis of the trades executed by Partha Sarathi Dhar (husband of Simi Bhaumik) on May 13, 2022 and May 20, 2022 has been carried out, which revealed the following-
Table No. 5
DATE |
SYMBOL |
INSTR TYPE |
BUY QTY |
BUY
|
BUY TRADE START TIME |
SELL QTY |
SELL VALUE |
SELL TRADE END TIME |
Reco Time |
13-May- 22 |
COROMA NDEL |
FUTS TK |
625 |
5,66,250.00 |
12:44:28 |
625 |
5,67,531.25 |
12:46:41 |
12:46 |
20-May- 22 |
SBILIFE |
FUTS TK |
2,250 |
24,32,437.50 |
12:36:42 |
2,250 |
24,33,900 |
12:48:35 |
12:48 |
33. On assessing the sequence of above events, it is seen that Simi Bhaumik received recommendations in advance from Mudit Goyal and in turn she passed on the information to her husband Partha Sarathi Dhar, who then executed trades based on receipt of those recommendations. It can further be seen that the trading activities/ decisions of Partha Sarathi Dhar were influenced by the advance information received from Simi Bhaumik, who in turn received those recommendations from Mudit Goyal. Considering the connections and other material evidence, the above sharing of information by Mudit Goyal to Simi Bhaumik and then to Partha Sarathi Dhar, who then executed trades in that segment suggest that sharing of information by Mudit Goyal was not in the ordinary course of sharing between two experts.
E.3. Sharing of advance information amongst Mudit Goyal, Simi Bhaumik and Nirmal Kumar Soni
34. From the evidence collected during investigation, it is observed that Nirmal Kumar Soni had two mobile numbers registered in his name (discussed at para 11) It was also seen that a WhatsApp chat between Simi Bhaumik and Mudit Goyal was shared by Nirmal Kumar Soni from his one mobile number (931XXXX971) to his other mobile number (773XXX742). The screenshot of the same is shown below-
Screenshot no. 5
35. From the above, it is seen that Nirmal Kumar Soni had information regarding WhatsApp chats shared between Simi Bhaumik and Mudit Goyal. The chat dated October 25, 2022 indicates that Mudit Goyal had communicated to Simi Bhaumik about his intent to temporarily discontinue sharing of stock recommendations in advance with her. It can be inferred that Simi Bhaumik not only shared her stock recommendations with Nirmal Kumar Soni but also passed on information about stock recommendations to be given by Mudit Goyal. During the investigation, it has been seen that the aforementioned Whatsapp chats were not found in the seized devices of Simi Bhaumik and Mudit Goyal, which implies that these Whatsapp chats were deleted by them from their mobile phones. However, these whatsapp chats recovered from the mobile of Nirmal Kumar Soni demonstrates sharing of advance information about stock recommendation by Mudit Goyal to Simi Bhaumik and from Simi Bhaumik to Nirmal Kumar Soni.
E.4. Sharing of advance information amongst Mudit Goyal, Simi Bhaumik (and Partha Sarathi Dhar), Kiran Jadhav and Nirmal Kumar Soni and trading based on such information
36. Another instance has been observed where there was flow of information amongst certain Noticees. On June 22, 2022 at 02:10 PM, Mudit Goyal had recommended to “sell” “CHAMBLFERT” on Zee Business as illustrated by the screenshot below:
Screenshot no. 6
37. The Whatsapp chats retrieved from the seized devices show that the information regarding above mentioned recommendation was shared by Simi Bhaumik (974XXXX790) with Partha Sarathi Dhar (974XXXX921) at 02:04 PM indicating it to be a forthcoming recommendation from Mudit Goyal, to be broadcasted on Zee Business.
Screenshot no. 7
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