Arshad Warsi, Wife among 31 Barred from Markets for Manipulating Sadhna Broadcast Scrip via 2 YouTube Channels
Moneylife Digital Team 02 March 2023
While impounding alleged illegal gains worth Rs41.85 crore earned from manipulating Sadhna Broadcast Ltd scrip, market regulator Securities and Exchange Board of India (SEBI) has barred till further orders 31 entities, including Bollywood actor Arshad Warsi and his wife, Maria Goretti. SEBI found false and misleading videos uploaded on two YouTube channels recommending investors buy Sadhna scrip to earn extraordinary profits.
However, certain promoter shareholders, key management personnel (KMPs) of Sadhna, and non-promoter shareholders who held more than 1% of the shareholding in the company offloaded a significant part of their holdings at inflated prices and booked profits.
In an order, Ananth Narayan G, whole-time member (WTM) of SEBI says, "The factual matrix leads me to conclude that these noticees bear a higher and overall liability for the alleged fraudulent scheme which resulted in a gain for them at the cost of several thousand small investors who entered the scrip of Sadhna at artificially inflated prices. The observations also prima facie suggest that these noticees were effectively the orchestrators and ultimate beneficiaries of the alleged fraudulent scheme."
SEBI asked these 31 noticees to disgorge illegal gains worth Rs41.85 crore earned through the stock manipulation in an interest-bearing escrow account with a lien marked in favour of the market regulator.  
"While all the noticees are individually liable to disgorge the illegal gains individually made by them, noticee nos1 (Manish Mishra), 4 (Jatin Manubhai Shah), 5 (Heli Jatin Shah), 6 (Daivik Jatin Shah), 7 (Angad Ishwarlal Rathor), 10 (Subhash Agarwal), 11 (Gaurav Gupta), 23 (Bhim Singh Chaudhary) and 31 (Arpan Gupta), are jointly and severally liable for all of the illegal gain cumulatively made by all the noticees as tabulated in the table–16. Further, since noticee nos9 (Karavan Tradelink OPC Pvt Ltd), 14 (Varun Media Pvt Ltd), 16 (Sadhna Bio Oils Pvt Ltd) and 20 (Virtual Business Solution Pvt Ltd) are companies, the persons who, as per available records, were authorised to trade for the said companies shall be jointly and severally liable for the illegal gain made by the said companies, i.e., Gaurav Gupta (NS1) and Arpan Gupta (noticee no31), Paras Shah (noticee no21), Saurabh Gupta (noticee no15) and Daivik Jatin Shah (VC5) are jointly and severally liable for the illegal gains made by the companies for which they had carried out the fraudulent trades i.e., Sadhna Bio Oils (NS5), Virtual Business Solution (NS8), Varun Media (NS4) and Karavan Tradelink OPC (VC8), respectively," the WTM says in the order. 
SEBI categorised these 31 noticees as misleading message disseminators (MMD), net sellers or promoters and profit makers (NSs), volume creators (VCs) and information carriers (ICs). 
An investigation by the market regulator revealed that Manish Mishra, who was the MMD and VC, earned a profit of Rs14.46 lakh by manipulating Sadhna scrip. There are 13 entities labelled as NS that gained from the stock manipulation. It includes Sadhna promoters Gaurav Gupta (Rs7.60 crore) and his wife Shreya Gupta (2.18 crore), Pooja Aggarwal, chief executive officer (CEO) of Sadhna (Rs1.47 crore), Varun Media (Rs1.11 crore), Sadhna Bio Oils (Rs8.93 crore), Madhu Render Singh (Rs3.27 crore), Kundan Singh Bisht (Rs1.74 crore), Virtual Business Solution (Rs2.42 crore), Sulabh Dikshit (Rs1.45 crore), Bhim Singh Chaudhary (Rs70.49 lakh), Yogesh Kumar Gupta (Rs1.17 crore), Rajshree Goel (Rs3.93 crore) and Sunil Goel, who earned illegal gains of Rs2.72 crore. 
Besides Mr Mishra, 12 VCs earned money from the Sadhna scrip. It includes Anshu Mishra (Rs6.37 lakh), Dipak Dwiwedi (Rs60.51 lakh), Jatin Manubhai Shah (Rs1.04 crore), Heli Jatin Shah (Rs12.05 lakh), Daivik Jain Shah (Rs4.61 lakh), Angad Ishwarlal Rathod (Rs9.60 lakh), Karavan Tradelink OPC (Rs24.13 lakh), Arshad Hussain Warsi (Rs29.43 lakh), Maria Goretti Warsi (Rs37.56 lakh) and Iqbal Hussain Warsi earned Rs9.34 lakh from the stock manipulation. 
There was a spurt in the price and volume of scrip of Sadhna between April 2022 and mid-July 2022. A significant portion of the volume during this period resulted from the trades executed by some of the noticees in this case. During the second half of July 2022, false and misleading videos about the company were uploaded on two YouTube channels, 'The Advisor' and 'Moneywise'. These YouTube videos peddled false and misleading news to recommend that investors should buy the Sadhna stock for extraordinary profits. 
The WTM says, "I note that the elaborate modus operandi adopted by the noticees, including the egregious misuse of patently false and misleading YouTube videos, had led to a drastic increase in the number of small shareholders (i.e., from 2,167 to 55,343 shareholders) who ended up buying shares from the noticee net sellers and volume creators at inflated prices. The financial impact that the fraudulent activity has had on small investors is undoubtedly a matter of grave concern. The pattern of false YouTube video uploads and artificial interest created in the scrip lay bare the noticees' utter disregard for the law. Persons who engage in a such coordinated manner of fraudulent trading have the propensity to continue to wreak havoc on the securities market and dump shares at artificially inflated prices on unsuspecting small shareholders." 
SEBI also found that, during the investigation period, Mr Mishra transferred Rs64.99 lakh to Google LLC to promote the YouTube channels created and administered by him. "Despite the enthusiastic messages in Manish Mishra's YouTube videos encouraging viewers to acquire shares in Sadhna, he liquidated his shares in Sadhna and allegedly made profits."
"Noticee net sellers and certain volume creators, which includes the promoters and CEO of Sadhna Broadcast, through the coordinated involvement of MMD, IC and VCs, are alleged to have made illegal gains by way of the alleged fraudulent and manipulative scheme. Considering the probability that the said noticees may divert the alleged unlawful gains before the investigation is concluded and directions for disgorgement, if any, are passed, non-interference at this stage would result in irreparable injury to the interest of the securities market and the investors. Considering the facts and circumstances of the case and the prima facie conclusion that a manipulative scheme has been employed, I am convinced that, pending detailed investigation, the balance of convenience lies in passing interim directions against the noticees inter alia for impounding and retaining the alleged unlawful gains," the SEBI WTM says.
1 year ago
To show that SEBI is not a non-functional body they have gone after a small fish while the big whale Adani group company shares are hitting UCs and LCs alternatively without any logical explanation.
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