Sebi noted that the liability for the illegal gain made by each entity to this order shall be borne by them individually.
Market regulator SEBI on Tuesday confirmed the securities market ban on 22 entities in a case related to manipulation of the share price of Sadhna Broadcast by way of uploading misleading videos on YouTube channels.
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In addition, the regulator restrained all the entities except Kundan Singh Bisht from dealing in the scrip of Sadhna during the pendency of an investigation and the total estimated amount of illegal gains through the alleged manipulation has been revised to Rs 38.61 crore.
“I hereby confirm the directions issued vide the interim order dated March 2, 2023 read with confirmatory order dated July 20, 2023, subject to some modifications, the noticees except Kundan Singh Bisht are restrained from dealing in the scrip of Sadhna during the pendency of the investigation. The liability for the illegal gain made by Manish Mishra, Anshu Mishra and Dipak Dwiwedi individually shall stand modified,” SEBI’s Whole-Time Member Ananth Narayan G said in the order.
In March, the watchdog barred various entities in the case and the estimated illegal gains earlier were Rs 41.85 crore.
In a 125-page confirmatory order in the case with respect to 22 entities on Tuesday, SEBI refused to lift the ban on 21 of them.
“I find that the submissions of the noticees, except that of Kundan Singh Bisht, are insufficient to refute the prima facie conclusions drawn in the interim order.
“Consequently, the prima facie findings in the interim order dated March 2, 2023 that the noticees have engaged in a fraudulent and manipulative scheme, resulting in contravention of provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, stand confirmed,” Ananth Narayan G added.
The watchdog noted that the liability for the illegal gain made by each entity to this order shall be borne by them individually. The directions for impounding issued against Subhash Agarwal, Saurabh Gupta, Paras Shah and Arpan Gupta are hereby revoked, as no illegal gains were said to be made through trades directly done by them, the SEBI said.
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Further, the SEBI gave relaxations to Bhim Singh Chaudhary and Yogesh Kumar Gupta and permitted them to withdraw funds to the extent of Rs 1 lakh per month to meet the medical expenses of their family members. The latest order pertains to 22 noticees.
On March 27, the Securities Appellate Tribunal (SAT) had set aside the interim order with respect to four noticees — Aahuti Rasik Mistry, Arshad Hussain Warsi, Maria Goretti Warsi and Iqbal Hussain Warsi.
Besides, a confirmatory order dated July 20 has been passed with respect to five other noticees in the case. ”The investigation shall be carried out without being influenced by any of the directions passed or any observation made either in the interim order or in the present order.
“Based on the outcome of the investigation, appropriate proceedings will be initiated in accordance with law,” the SEBI said in the order on Tuesday.
In its interim order passed on March 2, the SEBI said it had found that during the second half of July 2022, false and misleading videos about Sadhna Broadcast 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 SEBI said.
Following the release of the misleading YouTube videos, there was an increase in the price and trading volume of the Sadhna scrip. The volumes appear to have been contributed by a large number of retail investors likely influenced by the misleading YouTube videos.
During this period, certain promoter shareholders, key management personnel of Sadhna and non-promoter shareholders offloaded a significant part of their holdings at inflated prices and booked profits.
The SEBI has classified these entities into categories like creators of YouTube channels, net sellers/promoters and profit makers, volume creators (VCs) and information carriers (ICs).
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The entities orchestrated an egregious case of “pump-and-dump” of Sadhna Broadcast Limited, wherein they collectively helped create trading volumes and interest in the scrip, spread patently false and misleading YouTube videos about the scrip and hence, induced unsuspecting small investors to buy the Sadhna scrip at elevated prices, it added.
