SEBI bars anchor Pradeep Pandya, expert Alpesh Furiya from advising on securities market

The Securities and Exchange Board of India (SEBI) has barred Pradeep Pandya, then CNBC Awaaz Markets editor, and Alpesh Vasanji Furiya, an investment expert, from the capital markets. They are directed to "cease and desist" from giving investment advice about the securities market until further notice.

Pradeep Pandya used to host various shows on CNBC Awaaz, such as "Pandya ka Funda", "Pehla Sauda", "Aakhri Sauda", and "10 Ke Dumdaar Trade". Alpesh Vasanji Furiya gave stock recommendations as a guest and was associated with CNBC Awaaz for the past 13 years.

Network18 Group said in a statement, "The Network18 Group, of which CNBC Awaaz is a part, has a detailed code for dealing in securities by employees with access to price-sensitive information. The code forbids short-term trading and speculation. It mandates that such employees own securities for at least six months and lays down detailed guidelines for disclosure of holdings."  

Network18 Group's statement further adds that Mr Pandya resigned from their organisation in August. As detailed in the SEBI order, his actions would constitute a clear violation of Network18's code and ethical standards, and they will continue to provide all possible assistance to SEBI authorities.

SEBI found that Pradeep Pandya and Alpesh Vasanji Furiya were front-running and engaged in "buy-today-sell-tomorrow" trades in "synchronisation" with recommendations made on Pandya's show. The SEBI order said the trades happened a day before the show aired and were sold immediately after. Proceeds generated through these trades were up to Rs 8.4 crore.

SEBI's directions were made in an interim order issued today. Pradeep Pandya and Alpesh Vasanji Furiya's bank accounts have been frozen for debit transactions. They have been asked to provide a complete inventory of both moveable and immoveable assets held in their names.

On December 10, 2020, the National Stock Exchange of India Ltd forwarded a report that observed a strong correlation between the trading activity of Alpesh Vasanji Furiya and the recommendations provided by Pradeep Pandya on his show.

SEBI's examination found violations of the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, ("PFUTP Regulations").

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

CNBC Awaaz has a massive reach among Indian stock market investors. As Pandya recommended a stock, many investors and traders were bound to buy it once the stock market opened. The demand for the stock recommended pushed up its price. SEBI's order notes that Pradeep Pandya is "uniquely placed" to access the information about the recommendations. "Both are aware that such recommendations, when telecast, lead to an increase in the traded volume and price of the stock," the order says.

Evidence in call data records

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

Analysis of Call Data Records (CDRs) shows that Pradeep Pandya and Alpesh Furiya were in touch with each other throughout the relevant period. On April 17, 2020, there were multiple 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 telecast.

The order notes the timing of calls shows a strong preponderance of probability that Pradeep Pandya communicated the recommendation to 'Buy' in the stock to Alpesh Furiya before the telecast of the recommendation.

The trade volume in the stock on April 17, 2020, after Alpesh Furiya traded ahead of recommendations made by Pradeep Pandya, was nearly 11 times the average daily traded volume of the previous 10 trading days. Alpesh Furiya started his trading activity at 1:02:43 PM; during the 15 minutes, he purchased 16,218 shares of NRB Ltd, which accounted for 13.8 per cent of the total shares traded in this period, making him the highest buyer. On April 20, 2020, NRB opened 5.5 per cent higher than its previous close.

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

(The story erroneously mentioned Pradeep Pandya as CNBC anchor currently. It has been updated after receiving an official statement of the Network18 Group)