SEBI Restrains Former CNBC-Awaaz Television Anchor Pradeep Pandya From Dealing In Securities

In the second order of its kind this year, the Securities and Exchange Board of India has found a business news television anchor and three other people as well as two family entities belonging to them, guilty of violating securities laws. It's an ex-parte order—the parties have yet to represent their case.

Based on data shared by the National Stock Exchange, SEBI has found a strong correlation between stock recommendations made in shows hosted by Pradeep Pandya on CNBC-Awaaz and trading activity by market analyst Alpesh Furiya, his brother Manish Furiya, his wife Alpa Alpesh Furiya and two related entities for periods between November 2019 to December 2020.

The findings details in SEBI's interim order are:

• Pandya and Alpesh were in frequent touch via phone—Alpesh made 377 calls to Pandya between Jan. 1 and Dec. 31, 2020.

• Alpesh Furiya and connected entities made trades based on advance knowledge of stock recommendations made on Pandya's shows.

• The buy leg of the transactions were undertaken on the day prior to the recommendation day and sell transaction were done around the time of the recommendations being aired.

• For instance, of the total 670 short term trades undertaken by Alpesh, 287 were prima facie synchronised with Pandya's recommendations, amounting to Rs 288 crore in gross value and Rs 5.38 crore in gains. Similar transactions by Manish, Alpa and the two family entities are detailed in the order, amounting in total gains of Rs 8.4 crore.

• SEBI has listed some transactions in its order by way of illustration. On Friday, April 17, 2020, Alpesh bought over one lakh shares of NRB Bearings Ltd. at an average price of Rs 66 per share. The next trading day the stock was recommended on Pandya's show at about 9:25 a.m. Furiya sold his shares at the same at an average Rs 77 apiece.

• Recommendations on Pandya's shows had a positive impact on the price and volume of the recommended stock, giving the parties confidence that such trades will result in gains.

• The price rise couldn't be attributed to any material, relevant price-sensitive corporate announcement.

• That Pandya knew well in advance about the stocks that would be recommended on his shows.

• That Alpesh and Pandya spoke in the course of such transactions. For instance, on the day of purchasing NRB Bearings shares, there were four calls between them totalling over nine minutes. And on the day of the recommendation and share there was one brief 18-second call.

• Furiya's trading activity was undertaken in a manner to induce investor interest in the stock.

• In some cases, Furiya appeared on Pandya's shows and affirmed his recommendations even as he was selling those shares.

The actions of Pandya, Furiya and related entities were prima facie found to be unfair and manipulative and in violation of SEBI's Prevention of Fraudulent and Unfair Trade Practices Regulations.

Based on which SEBI has directed that:

• Pandya, Alpesh and related parties be restrained from buying/selling or dealing in securities, directly or indirectly.

• Pandya and Alpesh to cease from offering any investment advice or recommendations via any media.

• Over Rs 8 crore to be impounded from their bank accounts till which time their accounts to remain frozen. Of that Rs. 6.5 crore to be impounded jointly from Pandya and Alpesh's accounts.

• They aren't to dispose or alienate any assets.

To be clear, this is an ex-parte, interim order and not a final one. The parties have 21 days to file their responses/objections and seek to be heard.

The securities regulator had, in January this year, passed a similar order against another CNBC-Awaaz anchor, Hemant Ghai.

Pandya recently moved from CNBC-Awaaz to ET Now Swadesh—a Hindi channel that was launched today by the Times Network. For a brief period prior to 2019, Pandya also worked with BloombergQuint. He hasn't responded to a BloombergQuint request for comment on this story. We weren't able to reach the Furiyas.