In its interim order, SEBI accused Salgaocar of divulging Non-Public Information about impending large trade orders from big clients to Parekh
The matter was briefly heard by the tribunal on Tuesday, where both sides presented initial submissions before the hearing was adjourned for further arguments.
Salgaocar has approached SAT challenging the Securities and Exchange Board of India’s (SEBI’s) rejection of his request to cross-examine Parekh. He contends that since SEBI’s interim order, dated January 3, 2025, relied significantly on Parekh’s statements to build a case against him, the right to cross-examination is essential to test the veracity of the evidence.
Blame Game
In its interim order, SEBI accused Salgaocar of divulging non-public information (NPI) about impending large trade orders from big clients to Parekh. According to the regulator, Parekh then used this NPI to instruct other entities (front-runners) to take positions and profit from the subsequent block trades, resulting in a fraudulent scheme of synchronised trading and unfair gains. SEBI also justified the disgorgement of ₹27 crore in commissions earned by Salgaocar from broking firms, labelling them as ‘undue commissions’.
Salgaocar’s counsel, however, defended the practice of scouting for counterparties in large block deals as “quite normal practice” and done with the clients’ knowledge. His petition states that he approached Parekh around 2021–22 because the latter represented himself as “well connected” and having the bandwidth to provide counterparties for large mandates he received from global funds.
The counsel stressed ignorance of Parekh’s alleged activities, arguing, “I didn’t know that behind my back… he was himself taking those positions and doing all these front running activities”. On the necessity of cross-examination, the counsel added that Parekh’s statement before SEBI has the potential of implicating Salgaocar by suggesting he “knew that all these people… were taking those positions”.
SEBI defence
SEBI’s counsel countered that the regulator’s findings were not based solely on Parekh’s statement, arguing, “What he says is I have used a statement for drawing adverse inferences but that statement is not exclusive. There are other things also.”
Salgaocar’s plea before SAT argues that once a statement forms part of the evidentiary record and is adverted to in the show-cause proceedings, denial of the right to cross-examine the witness “vitiates the proceedings”. The petitioner further contends that SEBI’s interim order has damaged his reputation and threatens his livelihood.
A source aware of the matter said that the regulator expects the two would collude to implicate only Ketan Parekh and as SEBI’S foundation of front-running weakens if Parekh says that Salgoacar was not aware of the trades executed through traders.
The Tribunal will now hear further arguments on Wednesday.
Published on November 18, 2025
