SAT reverses Sebi decision, okays Ketan Parekh's cross-examination

In January, Sebi had issued an ex parte interim order-cum-show cause notice against 22 entities, including Salgaocar (the appellant) and Parekh

The Securities Appellate Tribunal (SAT) has overturned a Sebi decision and granted Singapore-based Rohit Salgaocar the right to cross-examine Ketan Parekh in an alleged insider trading case involving unlawful gains of ₹66 crore.

 

In January, Sebi had issued an ex-parte interim order-cum-show cause notice against 22 entities, including Salgaocar (appellant) and Parekh. The regulator alleged that Salgaocar, a director at Strait Crossing, passed on unpublished price-sensitive information about impending trades to Parekh, who then coordinated transactions through a network of connected entities.

 

SAT has now set aside Sebi’s August communication denying Salgaocar’s request filed in July for the cross-examination of Parekh. 

Counsel Vinay Chauhan, who represented Salgaocar, submitted that Parekh’s statements during the investigation were vague and susceptible to multiple interpretations.

 

Given the seriousness of the charges and the impounding directions, the tribunal, led by Justice PS Dinesh Kumar, held that such statements warranted further scrutiny.

 

“The appellant has submitted his reply and is willing to cooperate and participate in the proceedings before the whole time member whereas, Ketan Parekh has not filed his reply. In our view, in the facts of this case appellant’s request for cross-examining Ketan Parekh merits consideration for more than one reason,” said the SAT bench in an order.

 

The tribunal emphasised that principles of natural justice must be upheld, citing past precedents that permitted cross-examination of co-noticees in similar proceedings.

 

Sebi has been directed to schedule Parekh’s cross-examination and notify Salgaocar accordingly.

 

Salgaocar, for his part, has maintained that his interactions with Parekh were limited to legitimate business referrals for foreign clients and did not involve sharing insider information.