Tiger Global—The 'Big Client' Behind Ketan Parekh's Front-Running Scandal

The US-based "big client" through which Ketan Parekh was allegedly front-running trades was Tiger Global Management, as per the data available on the stock exchanges.

The Securities and Exchange Board of India on Thursday imposed a liability of Rs 65.7 crore on Ketan Parekh—earlier involved in the infamous stock market scam of 2000—in the extended front running case. Along with Parekh, the liability was also imposed on Rohit Salgaokar and other accused.

SEBI, in its 188-page interim order, found that Salgaocar—a Singapore citizen—had connections with a "US-based fund house" through which he knew about the trades that were to be taken up by it.

Two funds of the "Big Client" sold 52.5 lakh shares of PB Fintech Ltd. on Nov. 11, 2022, according to the order. The regulator did not provide the name of the US-based fund.

During the said date, Tiger Global Eight Holdings and Internet Fund III Pte Ltd—units of Tiger Global sold 1.27 crore shares cumulatively, at an average price of Rs 374.6 per share, according to the block deal data from BSE.

GRD Securities Ltd., Salasar Stock Broking Ltd. and Anirudh Damani have matched their trades with the "big client" for 20.61 lakh shares, SEBI statement said.

A spokesperson for Tiger Global confirmed to NDTV Profit they traded PB Fintech shares, but denied the allegations of trading those shares as per the SEBI order. "We did not trade the identified securities other than PB Fintech, nor did we trade through the named brokers or persons in the SEBI order," the spokesperson said.

How the trade was executed:

• On Nov. 11, 2022, before normal market hours, Salgaocar and the trader of the "big client" were discussing about Policybazaar (PB Fintech), according to the SEBI order.

• Trader of the "big client" confirmed to Salgaocar that they would sell Policybazaar's shares that day, the order said.

• From 9:00 am to 9:58 am, Parekh gave multiple instructions to sell scrip of Policybazaar at various price in the WhatsApp group “Jack-Saro”, it added.

As per the SEBI order, Parekh used to work systematically once he got the information from Salgaocar and executed trades from several accounts, causing illegal gains.

Further, Salgaocar used to tell traders of the US-based fund the name of the particular Indian trading member to whom the deal ticket was to be sent for execution of trades. About 90% of trades of this fund that were executed by Motilal and Nuvama were referred by Salgaocar, as per the order.

SEBI observed "Parekh and Salgaocar devised the scheme," and that the earlier debarred market operator (Parekh) had violated security law provisions several times.

Parekh was earlier banned by SEBI in 2003 for 14 years on allegations of insider trading, price rigging and illegal diversion of bank funds into the stock market.