Rohit Salgaocar Approaches SAT After SEBI Rejects Plea to Cross-Examine Ketan Parekh in Front-Running Probe
In a significant development in the ongoing SEBI front-running case, Singapore-based investor Rohit Salgaocar has moved the Securities Appellate Tribunal (SAT) challenging the market regulator’s decision to deny his request to cross-examine controversial stock broker Ketan Parekh. The petition argues that SEBI’s refusal violates the principles of natural justice and undermines his ability to defend against allegations of coordinated front-running activities.
The dispute stems from SEBI’s interim order, which accused Salgaocar of benefitting from non-public information (NPI) related to large trades placed by a major foreign institutional client. The regulator alleged that Salgaocar passed on confidential trade information to Parekh, who in turn coordinated with other market participants to execute front-running trades.
SAT Petition Accuses SEBI of Denying Fair Hearing
According to court documents, Salgaocar has contended that SEBI relied on portions of Parekh’s recorded statements during its investigation, making cross-examination essential to establish the veracity and context of those claims. His petition states that once a statement forms part of the investigative chain, the accused must be granted the right to test it.
The plea submitted to SAT notes:
“Once the statement has formed part of the evidentiary record and has been adverted to in the show-cause proceedings, the Appellant is entitled to test its veracity by cross-examination. Denial of this right vitiates the proceedings.”
It further argues that SEBI’s refusal is “particularly grave” given the severe consequences of the interim order, including market restrictions, freezing of financial accounts, and reputational damage.
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Salgaocar Denies All Allegations in SEBI Front-Running Case
Salgaocar has firmly rejected the allegations made in SEBI’s interim order. He maintains that he had no involvement in any front-running activity and no connection with the alleged front-runners identified by SEBI. According to him, his interactions with traders of the Big Client were legitimate and intended solely to help the client identify willing counterparties for large transactions.
He also claims that any further communication of the alleged non-public information to Parekh was outside his control and done with a bona fide intention, not for personal gain. Salgaocar adds that there is no financial linkage between him and Parekh, nor any evidence that he benefited from profits allegedly made by the front-running entities.
SEBI Rejects Cross-Examination Saying Parekh’s Statement Not Used as Evidence
Despite Salgaocar’s submissions, SEBI rejected the request in August 2025, asserting that Parekh’s statements were not relied upon as sole evidence against him. In its communication, SEBI stated that it had not drawn any adverse conclusions based “exclusively” on Parekh’s testimony, and therefore cross-examination was not warranted.
SEBI’s interim order dated January 3, 2025, lists Salgaocar and Ketan Parekh as Noticee 1 and Noticee 2, respectively. The regulator maintains that even without Parekh’s testimony, there is sufficient prima facie evidence to establish a coordinated exchange of NPI relating to the Big Client’s trades.
SEBI’s Interim Findings Highlight Communications and Trading Patterns
The interim order alleges that Salgaocar had advance knowledge of large trade orders of the Big Client and passed that information to Parekh through Bloomberg chats and other communication channels. SEBI claims the information was then used to direct front-running trades by various market participants.
The order notes:
“There is a prima facie conclusion that the NPI pertaining to impending orders of the Big Client in various scrips were being communicated by Rohit Salgaocar to Ketan Parekh, who was communicating trading instructions to other Noticees for execution of trades from the trading accounts of FRs.”
According to SEBI, discrepancies between Salgaocar’s statements and chat records raised red flags regarding the identity of counterparties he purportedly sourced for the Big Client.
Interim Order Leads to Heavy Penalties and Reputational Damage
In his SAT petition, Salgaocar states that the interim order has severely impacted his professional standing and livelihood. SEBI had impounded alleged illegal gains of Rs 27.06 crore, imposed liability amounting to Rs 38.70 crore, and imposed market access restrictions on him. The action triggered the termination of his professional engagement with the Big Client, which, according to him, has caused “irreparable reputational harm.”
The case also involves five other accused who have deposited Rs 38.70 crore with SEBI pursuant to an order of the Special SEBI Court. While others were allowed to resume market activities, both Parekh and Salgaocar continue to face restrictions. Recently, the court permitted Parekh to travel abroad after he deposited Rs 27.06 crore, representing the pending portion of alleged illegal gains.
SAT Yet to Hear the Matter
Salgaocar’s petition, filed on September 23, is currently pending before SAT. The tribunal is expected to take up the matter in the coming weeks. The outcome will be closely watched, as the case raises important questions about procedural fairness in SEBI’s investigative processes and the extent to which cross-examination rights apply in market-regulation proceedings.
