The tribunal granted partial relief to the appellants by modifying Sebi's directions on trading restrictions and account freezes, making them conditional on the deposit of the said amount.
The Securities Appellate Tribunal (SAT) on Thursday directed the Avadhut Sathe Trading Academy (ASTA) and its directors Avadhut Sathe and Gouri Sathe to deposit Rs 100 crore in connection with a December 2025 order of the Securities and Exchange Board of India (Sebi), which had ordered impounding of Rs 546 crore as alleged 'illegal gains'.
Partial Relief for Avadhut Sathe Academy
The tribunal granted partial relief to the appellants by modifying Sebi's directions on trading restrictions and account freezes, making them conditional on the deposit of the said amount.
'The appeal is allowed in part. The directions in paragraph 83(ix) are modified and the directions stipulated in paragraphs (iii), (vi) and (vii) shall cease to apply upon the appellants depositing a sum of Rs 100 crore in terms of direction 83(v),' SAT Presiding Officer Justice P S Dinesh Kumar noted in the order.
SAT said it arrived at the Rs 100 crore figure after taking into account the value of the academy's fixed assets and a tax component of about Rs 166 crore.
In its ex-parte interim order-cum-show cause notice, Sebi had alleged that ASTA was providing investment advisory (IA) and research analyst (RA) services without registration, under the guise of stock market training programmes.
While ASTA sought complete quashing of Sebi's order, the tribunal declined to do so, observing: 'In our considered opinion, in view of our finding that Sebi has made out a prima facie case of violation of IA and RA Regulations, the appellants shall not be entitled to such relief.'
The tribunal also directed ASTA and its directors to file an affidavit before Sebi's whole-time member (WTM) disclosing full details of their assets, supported by valuation certificates, along with an undertaking not to alienate their fixed assets.
YouTube Testimonials Under Sebi Lens
During the hearing, ASTA argued that its courses were purely educational and that Sebi's 'harsh order' had damaged its reputation.
It also contended that the regulator should have granted a hearing before passing the interim order.
SAT, however, noted that the appellants had consciously refrained from making submissions on the merits, as the matter was still at the stage of filing a reply to the show cause notice.
The tribunal also observed that ASTA continued to upload testimonials on its YouTube channel even after receiving an administrative warning from Sebi.
Clarifying the scope of its observations, SAT said they were limited to adjudicating the appeal and directed that the WTM pass a final order 'wholly uninfluenced' by the tribunal's findings.
ASTA has been asked to file its reply within four weeks, with Sebi directed to conclude the proceedings as expeditiously as possible.
Key points
- SAT directed Avadhut Sathe Trading Academy and its directors to deposit Rs 100 crore.
- The order relates to Sebi's December 2025 action impounding Rs 546 crore as alleged illegal gains.
- Trading restrictions and account freezes will ease if the Rs 100 crore is deposited.
- SAT found a prima facie case of violation of IA and RA regulations by ASTA.
- ASTA and its directors must disclose assets and Sebi will pass a final order after hearing.
Feature Presentation: Ashish Narsale/Rediff
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