The Securities and Exchange Board of India (SEBI) has excluded Pradeep Pandya, editor-in-chief of CNBC Awaaz Markets, and Alpesh Vasanji Furiya, investment expert, capital markets. They are asked to “cease and desist” from giving investment advice in the securities market until further notice.

Pradeep Pandya hosts various shows on CNBC Awaaz, such as “Pandya ka Funda”, “Pehla Sauda”, “Aakhri Sauda” and “10 Ke Dumdaar Trade”. Alpesh Vasanji Furiya has given recommendations on actions as a guest and has been associated with CNBC Awaaz for the past 13 years.

SEBI found that Pradeep Pandya and Alpesh Vasanji Furiya were in the lead and engaged in “buy today-sell-tomorrow” transactions in sync with the recommendations made on Pandya’s show. SEBI’s order stated that the transactions took place a day before the show aired and were sold immediately thereafter. The revenue generated by these exchanges reached Rs 8.4 crore.

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The instructions from SEBI were made in an interim order issued today.

The bank accounts of Pradeep Pandya and Alpesh Vasanji Furiya have been frozen for debit transactions. They must also provide a complete inventory of movable and immovable property held in their name.

On December 10, 2020, the National Stock Exchange of India Ltd released a report that observed a strong correlation between the business activity of Alpsh Vasanji Furiya and the recommendations provided by Pradeep Pandya on his show Pandya Ka Funda on CNBC Awaaz.

SEBI’s review revealed violations of the Securities and Exchange Board of India Act 1992 (“SEBI Act”) and SEBI Regulations (Prohibition of Fraudulent and Unfair Business Practices Relating to the Securities Market) of 2003 (“PFUTP regulation”).

Pandya’s show featured recommendations on certain securities to buy / sell during the day. Furiya had extensive knowledge of these stocks, which he used to buy a day before being recommended on Pandya Ka Funda. The shares would then be sold on the day of the recommendation.

Platform used for handling

CNBC Awaaz has massive reach among Indian stock market investors. As Pandya recommended a stock, many investors and traders were required to buy it once the stock market opened. Demand for the recommended stock has pushed up its price. The SEBI order notes that Pradeep Pandya is “only placed” to access referral information. “Both are aware that such recommendations, when broadcast on television, lead to an increase in the volume traded and the price of the share,” the order reads.

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Evidence in call data records

Between January 1, 2020 and December 30, 2020, Pradeep Pandya and Alpesh Furiya made a total of 377 calls during 24 hours 29 minutes and 1 second.

Analysis of Call Data Records (CDRs) shows that Pradeep Pandya and Alpesh Furiya were in contact with each other throughout the relevant period. On April 17, 2020, there were several calls between him and Pradeep Pandya prior to the purchase of shares of NRB Bearings Ltd on April 17, 2020. Alpesh Furiya and Manish Furiya placed sell orders before this recommendation was released.

The order notes that the timing of the calls shows a strong preponderance of probability that Pradeep Pandya communicated the recommendation to “buy” the stock to Alpesh Furiya before the recommendation was broadcast on television.

The share trading volume on April 17, 2020, after Alpsh Furiya traded ahead of Pradeep Pandya’s recommendations, was nearly 11 times the average daily trading volume of the previous 10 trading days. Alpesh Furiya started trading at 13:02:43; During the 15 minutes, he bought 16,218 shares of NRB Ltd, which represented 13.8% of the total shares traded during that period, making him the biggest buyer. On April 20, 2020, NRB opened 5.5% more than its previous close.

The SEBI Ordinance says their popularity on social media provides them with an easy way to engage in unfair and fraudulent acts that would harm the interests of investors in the securities markets.

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