SAT Dismisses Ketan Parekh’s Plea to Cross-Examine Capital Group Traders in SEBI Front-Running Case

The Securities Appellate Tribunal (SAT) has dismissed an appeal filed by Ketan Parekh, which challenged the Securities and Exchange Board of India’s (SEBI) refusal to allow him to cross-examine two traders from Capital Group in an ongoing front-running case.

Presiding Officer Justice PS Dinesh Kumar stated on Monday that Parekh's request to cross-examine the two traders at this stage, after the matter had already been reserved for orders, was misconceived. The tribunal noted that once a matter is reserved, the only remaining right for an appellant is to challenge the final order.

The legal proceedings stem from an interim order issued by SEBI in January 2025 against Ketan Parekh and Singapore-based trader Rohit Salgaocar. The regulatory action involves allegations of front-running the trades of Capital Group, a large US-based foreign portfolio investor. In that interim order, SEBI had ordered the disgorgement of ₹65.77 crore in alleged unlawful gains.

SEBI has alleged that Rohit Salgaocar had advance access to information regarding the fund's trades and communicated this information to Parekh. According to the regulator, Parekh allegedly used various trading accounts and associates located in Kolkata to establish positions prior to the execution of the fund's trades.

Previously, SEBI rejected Parekh's request to question the two Capital Group traders on the grounds that their statements were not utilized to draw any adverse inferences against him. Furthermore, the traders stated that they did not know Parekh and were not named in SEBI's initial interim order.

Separately, in November 2025, SAT permitted Salgaocar to cross-examine Parekh and instructed SEBI to facilitate that process. Parekh has a prior history with market regulators, having been barred from the securities market for 14 years due to his involvement in the 2000 stock market scam.

With the dismissal of this appeal, Parekh must now wait to challenge any material relied upon by SEBI through an appeal against the final order.

"This ruling highlights the structured procedural boundaries within regulatory tribunals like the SAT. When matters reach the stage of being reserved for orders, requests for procedural additions such as cross-examinations are typically limited to ensure timely resolution. For businesses and market participants, this case underscores the critical importance of adhering strictly to procedural timelines and addressing evidentiary queries at the appropriate stages of regulatory investigations." — Dr. Shishir Gupta, Founder & CEO, StartupLanes