Latest news with #SadhnaBroadcastLtd
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Business Standard
3 days ago
- Business
- Business Standard
Why has Sebi barred Arshad Warsi from the securities market for a year?
The Securities and Exchange Board of India (Sebi) on Thursday barred Bollywood actor Arshad Warsi, his wife Maria Goretti, and 57 other entities from the securities market for periods ranging from one to five years. The crackdown follows an investigation into misleading YouTube videos that recommended investing in shares of Sadhna Broadcast Ltd (now Crystal Business System Ltd). According to a Sebi order issued, both Warsi and Goretti were fined ₹5 lakh each and prohibited from participating in the securities market for one year, news agency PTI reported. Earlier in March 2023, Sebi took action against Warsi, his wife, and several others in a related case involving misleading YouTube videos promoting shares of Sadhna Broadcast Ltd. In the order, Sebi had directed the impounding of illegal gains amounting to ₹41.85 crore accrued by the entities involved in the pump-and-dump scheme. It also ordered all 31 individuals to open an escrow account with a scheduled commercial bank and deposit the impounded amount within 15 days. Hefty penalties and disgorgement orders On Thursday (May 29), Sebi imposed penalties ranging from ₹5 lakh to ₹5 crore on the 57 other individuals and entities involved, including key promoters of Sadhna Broadcast. The order also directed all 59 entities to jointly and severally disgorge illegal gains amounting to ₹58.01 crore, along with 12 per cent interest per annum, from the end of the investigation period until the payment is made. Sebi's findings revealed that Warsi and his wife earned illicit profits of ₹41.70 lakh, and ₹50.35 lakh, respectively. Who are the masterminds behind the scheme? In its detailed 109-page order, Sebi identified Gaurav Gupta, Rakesh Kumar Gupta, and Manish Mishra as the masterminds of the scheme. Subhash Aggarwal, who served as a director at the registrar and transfer agent of Sadhna Broadcast, acted as a liaison between Mishra and the company's promoters. 'These individuals were the central characters who planned and executed the manipulative scheme,' the regulator said. How the scam was orchestrated According to Sebi, Peeyush Agarwal, a dealer at Choice, and Lokesh Shah, owner of the Delhi franchise of a stockbroker, facilitated accounts for Manish Mishra and the promoters of Sadhna Broadcast to execute trades that manipulated the stock price. Jatin Shah also played a significant role in operationalising the scheme, while other participants either enabled the manipulative activities or sought quick profits, the order said. Sebi noted that although some entities did not trade from their own accounts, they acted as information carriers or assisted in placing manipulative trades. Two-phase pump-and-dump scheme The regulator outlined a two-phase plan to manipulate the stock price: Phase 1: Connected and promoter-linked entities traded among themselves to steadily inflate the price of Sadhna Broadcast shares. Despite small trade volumes, the low liquidity of the scrip allowed these trades to disproportionately influence the price, creating an illusion of investor interest. Phase 2: Misleading and promotional videos were published on YouTube channels such as Moneywise, The Advisor, and Profit Yatra — all operated by Manish Mishra — to lure retail investors. These videos coincided with the artificial price surge and recommended SBL as a promising investment opportunity. Additional actions and ongoing proceedings Sebi clarified that Varun Media Pvt Ltd — a promoter entity — would not be fined due to ongoing insolvency proceedings, but the direction for disgorgement remains in place. The regulatory action follows complaints received between July and September 2022, alleging price manipulation and offloading of shares in Sadhna Broadcast. Investors flagged misleading YouTube videos that falsely promoted the company to lure unsuspecting buyers. Sebi subsequently launched a detailed investigation into trading activities in SBL's shares between March 8, 2022, and November 30, 2022. The regulator had already issued an interim order on March 2, 2023, against 31 entities, including promoters of SBL.
New Indian Express
3 days ago
- Business
- New Indian Express
Sadhna Broadcast case: Sebi bars Arshad Warsi, wife and 57 others from market up to 5 years
MUMBAI: Markets regulator Sebi has barred Bollywood actor Arshad Warsi, his wife Maria Goretti, and 57 other entities from participating in securities markets for periods ranging from one to five years in connection with a scheme involving misleading YouTube videos that recommended investors buy shares of Sadhna Broadcast Ltd (now Crystal Business System Ltd). According to reports the regulator imposed fines of Rs 5 lakh each on Warsi and his wife, who have both been restrained from the securities market for one year, according to a Sebi order issued on Thursday. The youtuber couple was charged for posting misleading videos on YouTube channels recommending investors to buy shares of Sadhna Broadcast. The other 57 entities, including promoters of Sadhna Broadcast, faced penalties ranging from Rs 5 lakh to Rs 5 crore. In addition to these penalties, Sebi directed all 59 entities to disgorge unlawful gains totalling Rs 58.01 crore along with 12 percent interest per annum, jointly and severally, from the end of the investigation period until the date of actual payment. The order revealed that Arshad Warsi earned profits of Rs 41.70 lakh, while Maria Goretti made Rs 50.35 lakh from the manipulation. The Sadhna Broadcast stock manipulation case centers on a coordinated "pump-and-dump" scheme executed through misleading YouTube videos to artificially inflate the company's share price. In mid-2022, videos on channels like The Advisor and Moneywise falsely claimed that Sadhna Broadcast Ltd. would be acquired by the Adani Group, enticing retail investors to purchase shares. This surge in buying volume led to a significant price increase, allowing promoters and insiders to sell their holdings at inflated prices. The 109-page order identified Gaurav Gupta, Rakesh Kumar Gupta, and Manish Mishra as the masterminds behind the scheme. Subhash Aggarwal, a director of the registrar and transfer agent (RTA) of Sadhna Broadcast Ltd, acted as an intermediary between Manish Mishra and the promoters. Sebi also named Peeyush Agarwal and Lokesh Shah as facilitators who provided accounts controlled by them to aid the manipulative activities. The order described the scheme as a classic 'pump-and-dump' operation executed in two phases. Initially, connected and promoter-linked entities executed trades among themselves to inflate the stock price artificially. Due to low liquidity, even small volume trades significantly impacted the price, creating a false market interest. In the second phase, misleading promotional videos were uploaded on YouTube channels such as Moneywise, The Advisor, and Profit Yatra, all run by Manish Mishra, to lure retail investors by amplifying the artificial market activity. Sebi's whole-time member Ashwani Bhatia stated, 'The overall conduct of the noticees reveals a classic pump-and-dump scheme, involving collusive trading to push prices up, followed by aggressive promotion and a coordinated sell-off by promoters.' While most entities were penalized, no monetary fine was imposed on Varun Media Pvt Ltd due to ongoing insolvency proceedings, though the company remains subject to disgorgement orders. The investigation was initiated after complaints received between July and September 2022 alleged price manipulation and offloading of shares in Sadhna Broadcast's stock, facilitated by misleading YouTube videos. An interim Sebi order was issued on March 2, 2023, against 31 entities, including the promoters, before the final order against 59 parties was passed. This crackdown highlights Sebi's intensified efforts to curb fraudulent and unfair trade practices in the securities market and protect investors from manipulative schemes.
Hans India
3 days ago
- Business
- Hans India
SEBI Cracks Down on Pump-and-Dump Scam Involving Bollywood Actor Arshad Warsi
In a sweeping regulatory move, the Securities and Exchange Board of India (SEBI) has barred Bollywood actor Arshad Warsi, his wife Maria Goretti, and 57 other individuals from participating in the securities market for periods ranging from one to five years. This action comes after SEBI's investigation into a pump-and-dump scheme linked to Sadhna Broadcast Ltd, now renamed Crystal Business System Ltd. The Pump-and-Dump Scheme: What Happened According to SEBI's final order issued on Thursday, the scheme involved a coordinated effort to artificially inflate the price of Sadhna Broadcast shares through misleading YouTube videos, generating public interest and driving retail investors to buy in. Once the price spiked, key players dumped their shares at inflated prices, pocketing massive profits before the stock crashed. SEBI's probe covered the period between March 8, 2022, and November 30, 2022. Who Benefited and What Are the Penalties? Gaurav Gupta emerged as the largest beneficiary, making a profit of Rs 18.33 crore. Sadhna Bio Oils Pvt. Ltd gained Rs 9.41 crore. SEBI ordered disgorgement of Rs 58.01 crore in unlawful gains from all 59 entities involved, with 12% annual interest from the end of the investigation period until full payment. Arshad Warsi and Maria Goretti were each fined Rs 5 lakh. These penalties are part of SEBI's broader crackdown on fraudulent market activities that harm retail investors and undermine market integrity. What Is a Pump-and-Dump Scheme? Pump and dump is a form of securities fraud where the price of a stock or other asset is artificially inflated so insiders can sell at a profit, followed by a sharp decline in value that leaves unsuspecting investors with significant losses. How It Works: Pump: Insiders or coordinated groups spread false or exaggerated information to hype up a stock. Retail investors, seeing the rising prices, rush to buy in. This pushes the stock price even higher. Dump: Once the price reaches a desired level, insiders sell their holdings. The stock price plummets, causing massive losses to latecomers. Why Is It Illegal? In regulated markets, pump-and-dump is considered securities fraud and is punishable under laws like the Securities Exchange Act in the U.S. and relevant Indian laws under SEBI regulations. In unregulated or loosely regulated markets (such as certain cryptocurrency exchanges), enforcement is more challenging, though regulators are increasingly cracking down on such schemes. For investors, this serves as a stark reminder: always research thoroughly and beware of too-good-to-be-true tips, especially on social media platforms.
