Timbor Home Stock Manipulation: SEBI Asks Paresh Chauhan To Disgorge ₹1.62 Crore, Slaps ₹5 Lakh Penalty

Moneylife Digital Team 01 January 2026

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has directed Paresh Nathalal Chauhan to disgorge illegal gains of ₹1.62 crore along with interest at the rate of 8%pa (per annum) and imposed a monetary penalty of ₹5 lakh for his role in a fraudulent scheme involving the shares of Timbor Home Ltd. The directions were issued under Sections 11 and 11B of the SEBI Act, following a fresh examination ordered by the securities appellate tribunal (SAT).

In an order, N Murugan, chief general manager (CGM) of SEBI, stated that Mr Chauhan has made unlawful gains, duly quantified for the purpose of disgorgement. Although the investigation has not quantified the loss to investors, the case establishes that innocent investors were fraudulently induced to trade in the scrip, resulting in losses when the perpetrators sold their holdings at inflated prices. “Mr Chauhan thus engaged in fraudulent, manipulative, and unfair practices that undermine trust and integrity in the securities market.”

The case relates to large-scale manipulation in the shares of Timbor Home during April 2014 to May 2015, a period marked by unsolicited bulk SMS campaigns, abnormal price movements and systematic offloading of promoter-linked shares. SEBI found that promoters reduced their shareholding from nearly 30% in March 2014 to almost nil by June 2015.

During this period, retail investors were lured into the stock through misleading SMS recommendations promising attractive returns. The investigation revealed that promoters initially transferred shares to a network of interconnected entities through off-market transactions without any disclosed consideration.

These connected entities then carried out trades in small quantities to artificially inflate prices. Simultaneously, bulk SMS messages were circulated to create a false sense of demand and legitimacy. Once trading volumes rose sharply following the SMS campaign, promoter-linked entities began dumping shares in the secondary market at inflated prices.

Mr Chauhan was identified as a key connected entity who received over 27 lakh shares of Timbor Home through multiple off-market transfers from promoter-linked persons. SEBI noted that these transfers were executed without any recorded consideration and were closely aligned with the timing of the SMS circulation and subsequent offloading of shares.

SEBI further observed that Mr Chauhan was among the top sellers on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) during the relevant period, accounting for a significant portion of the total sell volume. His role was therefore considered central to the execution of the manipulation scheme.

Rejecting Mr Chauhan’s claim that his demat, trading and bank accounts were misused by a third party, SEBI concluded that his actions formed part of a coordinated and deceptive plan in violation of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003. Holding that the entire sale proceeds constituted unlawful gains, SEBI directed disgorgement of ₹1.62 crore with 8% interest and imposed a penalty of ₹5 lakh under Section 15HA of the SEBI Act.

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