SAT dismisses plea by Salasar Stock Broking in the Ketan Parekh case

Salasar will have to make the full deposit of wrongful gains in the alleged front-running matter

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The Securities Appellate Tribunal (SAT) on Wednesday rejected a plea by Salasar Stock Broking to consider a deposit of only 50 per cent of the profit in the alleged front-running matter involving Ketan Parekh and Rohit Salgaocar.

 

The matter pertained to directions issued by market regulator Securities and Exchange Board of India (Sebi) to impound illegal gains of around Rs 12.45 crore by Salasar, jointly with Parekh, Salgaocar, and four others, in its January 2 order.

 

“In the facts and circumstances of this case, we are of the considered view that the appellants’ prayer to consider deposit of only 50 per cent of the estimated profit as a condition to grant the interim prayer is devoid of merits. The prayer for interim order stands rejected,” noted Justice P S Dinesh Kumar.

 

The tribunal pointed out that Salasar preferred joining hands with Parekh in the alleged front-running transactions, even though it was public knowledge that Parekh had been implicated in several cases of fraud and manipulation in the securities market.

 

“Normally, in cases where the appellants are imposed with penalty, this tribunal directs deposits of 50 per cent of the penalty amount. We may hasten to add that it is not a rule. Interim orders are passed keeping in view the facts and circumstances of each case. In the case on hand, it is an admitted position that the WhatsApp screenshots are from the device belonging to the appellant Sumit Sonthalia. The facts recorded hereinabove also indicate cash transactions of huge quantity between Sumit Sonthalia and Ketan Parekh,” notes the order.

 

As per the Sebi order, Sonthalia was a facilitator in the alleged front-running scheme and a trader at Salasar Stock Broking. Sebi alleged that he executed trades in the proprietary trading account of Salasar as per the instructions of Parekh.

 

However, this order will have no binding effect on the probe by Sebi, and it has been directed to pass the adjudicatory orders wholly uninfluenced by this order. 

 

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