A market manipulator wanted by the Securities and Exchange Board of India (SEBI), who is responsible for one of the largest ‘pump-and-dump’ stock market operations of the past four years, is suspected to have fled India, according to officials.
Hanif Shekh, mastermind of a ₹1,500 crore SMS stock tip scam, has flown the coop while small investors are left with worthless penny stocks. Shekh’s social media account reveals he is enjoying the high life in Dubai, SEBI officials told The Free Press Journal.
“The racket involved sending bulk SMSes and circulation of stock tips through websites to attract gullible investors and dumping the holdings through multiple front entities once the scrips caught the fancy of the investors,” a SEBI official said.
Fake SMS IDs used to send bulk 'buy' recommendations to attract small investors
Investigations have revealed that Shekh created fake SMS IDs resembling those of prominent equity broking companies, such as Zerodha and ICICI Securities, to send bulk phone messages with ‘buy’ recommendations to entice small investors, while entities connected to him dumped shares in the market.
An order passed by SEBI official SK Mohanty on June 19 has estimated that Shekh made illegal gains to the tune of ₹144 crore by manipulating just five stocks.
The SEBI order links Shekh with several entities dabbling in stocks, including Mauria Udyog, 7NR Retail, GBL Industries and Darjeeling Ropeway Co. He has also been named in manipulating scrips including Leading Leasing Finance and Investment, Agrophos India Pvt Ltd, VB Industries Pvt Ltd.
SEBI alerted after it received complaints from investors online
SEBI was alerted about the racket when it received several investor complaints on its online grievance platform.
The regulator’s initial investigation suggested that the scam involved stock tips through bulk SMSes, which led SEBI to 226 entities linked to Shekh with multiple bank accounts and fund transfers in Ahmedabad, Mumbai and Kolkata. SEBI also recovered SMS compilations, forex bills, trading logs, Gmail links, and call data records with links to promoters of the small companies.
The investigation identified Kasambhai Shekh, Hasina Kasambhai Shekh, Robert Resources, Econo Trade India, Econo Broking (formerly Bansal Finstock) and Sai Metaltech among those directly linked to Shekh.
Shekh’s social media profile describes him as an entrepreneur, private equity and start-up investor, green-ship recycler at Alang Port and managing director of Econo Broking.
SEBI had in November 2022 fined Shekh ₹7 lakh for evading summons multiple times and recovery of some penalties levied against the economic offender is still pending.
