SEBI Ban Arshad Warsi: SEBI has taken strict action against Bollywood actor Arshad Warsi, his wife Maria Goretti, his brother and 56 others on charges of stock market fraud and has banned them from the securities market for 1 to 5 years.

The Securities and Exchange Board of India (SEBI) has taken strict action against Bollywood actor Arshad Warsi, his wife Maria Goretti, his brother and 56 others for fraud in the stock market. SEBI has banned all of them from the securities market for 1 to 5 years. Along with this, Arshad Warsi and his wife have been fined Rs 5 lakh each and ordered to return the illegal earnings of Rs 58.01 crore with 12% annual interest.

What is the whole matter?

The action is related to manipulation of shares of Sadhna Broadcast Limited (SBL), now renamed Crystal Business System Limited. SEBI's investigation found that it was a 'pump and dump' scheme, in which the price of shares was artificially inflated and then sold at higher prices. The scheme used misleading YouTube videos, uploaded on channels such as 'The Advisor', 'Midcap Calls', 'Profit Yatra', 'Moneywise' and 'India Bullish'. These videos gave false information about the company's financial health and future prospects, luring investors.

How did this scheme work?

According to SEBI's 109-page report, the scheme was run in two phases:

Phase 1: Promoters and affiliates gradually increased the share price by trading among themselves. Due to low liquidity, even small trades had a big impact on the prices, creating an illusion of interest in the market.

Phase 2: Subsequently, misleading and promotional videos were uploaded on YouTube, which were circulated through channels operated by Manish Mishra. These videos presented Sadhna Broadcast as an attractive investment opportunity, leading to a surge in the share price and trading volumes.

Role of main accused

SEBI named Gaurav Gupta, Rakesh Kumar Gupta and Manish Mishra as the masterminds of the scheme. Gaurav Gupta earned Rs 18.33 crore from the scheme and Sadhna Bio Oils Private Limited earned Rs 9.41 crore. Manish Mishra has been fined Rs 5 crore. Arshad Warsi, his wife and brother were classified as 'volume creators' who contributed to increasing trading volumes by buying and selling shares. According to SEBI, Arshad earned a profit of Rs 41.70 lakh and Maria earned a profit of Rs 50.35 lakh.

Arshad Warsi's side

Arshad Warsi had tweeted in 2023 claiming that he and his wife had zero knowledge of the stock market. He said that they invested in 'Sharda' (possibly a mispronunciation of Sadhna) on advice and lost all their hard-earned money. However, SEBI found on the basis of WhatsApp chats that Arshad was in touch with Manish Mishra and had traded from his, his wife's and brother's accounts.

SEBI action

SEBI has imposed a ban of 5 years on 7 people and a ban of 1 year on 54 people in this case. Apart from this, Manish Mishra has been fined Rs 5 crore, Gaurav Gupta, Rakesh Kumar Gupta, Subhash Aggarwal, Piyush Aggarwal and Lokesh Shah have been fined Rs 2 crore and Jatin Manubhai Shah has been fined Rs 1 crore.

PC:Patrika news