The Securities and Exchange Board of India (SEBI) has barred Bollywood actor Arshad Warsi, his wife Maria Goretti, and 57 other entities from accessing the securities markets for a period ranging from one to five years. The ban comes in connection with a pump-and-dump scheme involving the shares of Sadhna Broadcast Ltd, now renamed Crystal Business System Ltd.
SEBI imposed a fine of Rs 5 lakh each on Arshad and Maria, who were found to have made profits of Rs 41.70 lakh and Rs 50.35 lakh, respectively. According to the order, “The overall conduct of the noticees has revealed a classic pump-and-dump scheme. The price was systematically pushed upward through collusive trading, followed by aggressive promotional activity to draw in retail investors, and finally, a coordinated sell-off by the promoters.”
The scheme was executed in two phases. In the first phase, entities linked to Sadhna’s promoters manipulated the stock price through internal trades that falsely signaled market interest. The stock’s low liquidity allowed them to push the price up with minimal volumes. In the second phase, misleading videos were shared through YouTube channels such as Moneywise, The Advisor, and Profit Yatra. These videos, operated by Manish Mishra, falsely presented SBL as a high-return investment and were timed to boost artificial market activity.
SEBI has ordered all 59 entities to return a total of Rs 58.01 crore in unlawful gains along with 12 percent interest per annum from the end of the investigation period until full payment. Penalties ranging from Rs 5 lakh to Rs 5 crore have been imposed on the remaining entities.
The masterminds identified in the order are Gaurav Gupta, Rakesh Kumar Gupta, and Manish Mishra. Subhash Aggarwal, a director of the registrar and transfer agent of SBL, acted as a key intermediary. Peeyush Agarwal and Lokesh Shah were also found to have played crucial roles in facilitating the manipulative trades. Jatin Shah was cited as a central figure in executing the operation.
While several participants helped carry out the trades or acted as information conduits, SEBI noted that some did not trade from their own accounts.
SEBI also stated that no monetary penalty will be imposed on Varun Media Pvt Ltd, a promoter entity, due to ongoing insolvency proceedings. However, the company is still liable for disgorgement.
The final order follows an investigation prompted by complaints received between July and September 2022, which alleged price manipulation in the Sadhna Broadcast scrip. The investigation covered the period from March 8 to November 30, 2022. SEBI had earlier passed an interim order in March 2023 against 31 involved entities, including company promoters.
