SAT reserves order in appeal filed by Bollywood actor Arshad Warsi against Sebi’s ban order
The Securities Appellate Tribunal (SAT) on Friday reserved its order on an appeal filed by actor Arshad Warsi and others against an interim order that bars him and 31 others from the securities markets in connection with a YouTube-run share pump-and-dump scheme revolving around a company named Sadhana broadcast.
The cases pertains to uploading misleading videos on YouTube channels and recommending investors to buy the shares of Sadhna Broadcast Ltd
Earlier this month, Sebi noted that Arshad Warsi has made a profit of Rs 29.43 lakh and his wife has earned profit of Rs 37.56 lakh. Also, Iqbal Hussain Warsi has gained Rs 9.34 lakh. These three among others have been classified as volume creators by the capital markets regulator.
The Securities and Exchange Board of India received certain complaints wherein it was alleged that there was price manipulation and offloading of shares by certain entities in the scrip of television channel Sadhna Broadcast.
The complaints alleged that misleading YouTube videos with false content about the company were uploaded to lure investors.
Following this, the regulator conducted an examination during April-September 2022 and found that spurt in the price and volume of scrip of the company between April and mid-July 2022.
During the second half of July 2022, false and misleading videos about Sadhna were uploaded on two YouTube channels — The Advisor and Moneywise.
Subsequent to the release of the misleading YouTube videos, there was an increase in the price and trading volume of the 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.
One of the misleading videos on these YouTube channels was that Sadhna Broadcast Ltd is going to be taken over by Adani group and after the deal, the margins of the company will increase.
Sebi said that elaborate modus operandi adopted by the entities noticees including the egregious misuse of patently false and misleading YouTube videos, had led to drastic increase in the number of small shareholders of Sadhna — from 2,167 to 55,343 shareholders who ended up buying shares from the noticee net sellers and volume creators at inflated price.
