The Securities and Exchange Board of India (SEBI) has barred Bollywood actor Arshad Warsi and his wife Maria Goretti, along with 44 other entities, from the securities market for manipulating share prices of two companies through misleading YouTube videos.
SEBI also impounded illegal gains to the tune of ₹41.85 crore made by them.
According to the interim order, Warsi made a profit of Rs29.43 lakh, Goretti scooped Rs37.56 lakh, and Iqbal Hussain Warsi pocketed Rs9.34 lakh.
The investigation began after SEBI received complaints alleging that certain entities were engaging in price manipulation and offloading shares of Sadhna Broadcast Ltd and Sharpline Broadcast Ltd. The complaints alleged that misleading videos with false content about the two companies were uploaded to lure investors.
SEBI conducted an examination from April-September 2022 and found that there was a significant increase in the price and volume of shares of the two companies between April and mid-July 2022. False and misleading videos about Sadhna Broadcast were uploaded on two YouTube channels, ‘The Advisor’ and ‘Moneywise’, during the second half of July 2022. Similar videos about Sharpline Broadcast were uploaded on two YouTube channels, ‘Midcap Calls’ and ‘Profit Yatra’, in the second half of May 2022.
One misleading videos said Sadhna Broadcast was going to be taken over by the Adani Group while another claimed that Sadhana Broadcast was moving from TV production to movie production, with an American investor pumping in Rs1,100 crore to produce four devotional movies.
“The market regulator had received complaints of price manipulation and offloading of shares by certain entities in the scrip of television channel Sadhna Broadcast and New Delhi-based Sharpline Broadcast. Prima facie provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules were violated with misleading YouTube videos of false content about the company uploaded to lure investors,” a SEBI official.
In the case of Sadhna Broadcast, SEBI found that the elaborate modus operandi adopted by the entities, including the egregious misuse of patently false and misleading YouTube videos, had led to a drastic increase in the number of small shareholders, from 2,167 to 55,343, who ended up buying shares at an inflated price. The number of small shareholders increased from 517 to 20,009 in the case of Sharpline Broadcast.
SEBI has barred the 45 entities “from buying, selling, or dealing in securities either directly or indirectly, in any manner whatsoever until further orders”. Additionally, the entities have been directed not to dispose of any assets, including money in bank accounts, without prior permission from SEBI until the impounded amount is deposited in the escrow account.
With inputs from agencies
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