The Securities Appellate Tribunal (SAT) on Monday dismissed an appeal filed by Ketan Parekh challenging the market regulator Securities and Exchange Board of India's (Sebi) denial of his requests to cross-examine two traders of Capital Group. According to reports from The Hindu BusinessLine, Justice PS Dinesh Kumar, presiding officer of SAT, stated in the oral order that once the matter is reserved, the only right that remains for the appellant is to challenge the final order. The tribunal noted that the appellant's request to cross-examine the two entities after the matter is reserved after adjudication is misconceived, and consequently, the appeal fails. The bench emphasized that Parekh can now only challenge Sebi's final order in the matter.
The matter pertains to a Sebi interim order in January 2025, barring Parekh and Singapore-based trader Rohit Salgaocar from the securities market for alleged front-running of trades of a US-based foreign portfolio investor (FPI) which manages around $2.5 trillion worth of funds globally. As reported by The Hindu BusinessLine, Sebi had directed disgorgement of ₹65.77 crore of illegal gains made through the alleged scheme. The market regulator's previous order was interim and a final order is awaited in the matter. In November 2025, SAT had allowed Salgaocar to cross-examine Parekh and directed Sebi to facilitate the process.
According to The Hindu BusinessLine, Sebi alleged that Parekh, who was earlier debarred from the stock markets for 14 years for his role in the infamous stock market scam of 2000, orchestrated a new method for front-running the trades by staying out of the regulatory ambit. In this matter, the dealers were in touch with Salgaocar, who was in contact with Parekh for the alleged front-running. While Salgaocar provided the information on the forthcoming trades of the FPI which he had access to, Parekh built the positions through various associates in Kolkata. Sebi had alleged that Salgaocar had access to information on the fund's trades in advance and communicated the information to Parekh, who allegedly used various trading accounts and associates in Kolkata to build positions before the fund executed its trades.
As reported by The Hindu BusinessLine, while denying the request for cross-examination of the two traders by Parekh, Sebi stated that the statements of the traders were not used to draw any adverse inference against him as the traders had specifically said that they did not know Parekh. The two traders were also not named in Sebi's January 2025 order. The bench noted that if according to the appellant, any extraneous material has been used, which was not put to the appellant during the course of adjudication, that may at best be a ground of attack for the appellant to challenge the order that Sebi may pass in the proceedings initiated against the appellant.
