Sebi names Arshad Warsi, wife & others in share-rigging case; bans them from markets

Securities and Exchange Board of India (Sebi) on Thursday has taken strict action in the share-rigging case in two companies, namely Sadhna Broadcast and Sharpline Broadcast.  The capital markets regulator has issued an impounding order in the Sadhna Broadcast share rigging case, whereas it has issued an interim order in the Sadhna Broadcast share manipulation case.

In its probe, Sebi found out that offenders sold artificially inflated Sadhna Broadcast shares. These 45 entities made an illegal gain of Rs 41.90 crore. YouTube videos on channels named 'The Advisor' and 'Moneywise' were used to recommend shares of Sadhna Broadcast.

Sebi has taken action against the offenders who used social media platforms like YouTube to pump and dump shares of these companies. The list of offenders at Sadhna Broadcast includes Bollywood actor Arshad Warsi, his wife Maria and his brother Iqbal Warsi. All the offenders have been banned for a year.

It was alleged that there was price manipulation and offloading of shares by certain entities in the aforementioned scrips. The said complaints alleged that YouTube videos with false content, backed by paid marketing campaigns worth crores of rupees for additional reach were being uploaded to lure investors.

Once these unsuspecting investors entered the scrip, the offender entities offloaded their holding at an inflated price.

Sebi conducted its probe (preliminary examination) in the matters under Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations (PFUTP Regulations) 2003 of SEBI Act, 1922.

For Sadhna Broadcast, the probe was conducted between April 27, 2022 to September 30, 2022, whereas the period for Sharpline Broadcast was between April 12, 2022 to August 19, 2022, said the regulator in two separate orders.

In its two interim orders, Sebi has restrained all the offenders from buying, selling or dealing in securities either directly or indirectly, in any manner whatsoever, until further orders.

If they have any open position in any exchange-traded derivative contracts, as on the date of these orders, they may close/square off such positions within three months from the date of this order or expiry of such contracts, whichever is earlier, the order added.

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