The regulator has accused both men of acting in close coordination to profit from predictable price movements | Photo Credit: ABEER KHAN
SEBI’s January 3, 2025, interim order had alleged that non-public information (NPI) on a large foreign client’s impending orders was passed by Salgaocar to Parekh, who then relayed trading instructions to a network of front-runners. The regulator has accused both men of acting in close coordination to profit from predictable price movements.
In his appeal, Salgaocar argued that Parekh’s recorded statements form part of the evidence SEBI cited in the show-cause process, giving him the right to question their accuracy. “Once the statement has formed part of the evidentiary record… the Appellant is entitled to test its veracity by cross-examination. Denial of this right vitiates the proceedings,” his plea said. He added that the refusal “violates principles of natural justice,” particularly given the scale of punitive measures triggered by the interim order.
SEBI rejected his request in August, saying Parekh’s statement “has not been exclusively used” to draw adverse findings and therefore cross-examination was unnecessary. Salgaocar had earlier sought inspection of documents in January-February and formally asked to question Parekh in July.
‘No connection’
Denying the allegations, Salgaocar said he had “no connection” with any of the alleged front runners and had no reason to believe Parekh would misuse the information. He said the NPI was forwarded only to help identify willing counterparties and insisted there were no financial links or evidence of profit-sharing between them.
The interim order, however, said that there was a prima facie finding of NPI being passed from Salgaocar to Parekh and then to others for executing opposite trades. Following this, Salgaocar faced several restraints, including impounding of ₹27.06 crore in commissions, liability for ₹38.70 crore of alleged illegal gains made by unknown parties, a market ban, and freezes on his bank and demat accounts. His petition says the actions damaged his reputation, leading to the loss of his relationship with the Big Client.
The SAT case, filed on September 23, is currently pending.
In parallel, six accused in the matter have deposited ₹38.70 crore as directed by the Special SEBI Court, after which SEBI permitted them, except Parekh and Salgaocar, to resume market activities. The court recently allowed Parekh to travel abroad after he agreed to deposit ₹27.06 crore, the pending portion of ₹65.77 crore in alleged illegal gains attributed to the group
Published on November 14, 2025
