In March 2023, SEBI issued a show-cause Notice against Arshad Warsi & his wife Maria Goretti who were found to be involved in the Pump & Dump schemes of one of the listed stocks Sadhana Broadcasting.
Yes, the same company is running the Sadhana channel with various programs to detach oneself from worldly things.
But here the promoter of the company himself along with 45 other people was involved in the scam which led to the loss of uncountable traders and investors.
Here, let’s dive in to know the reality as published in one of the orders of SEBI.
Stock Manipulation Reported
Sadhana Broadcast was listed in BSE on January 18, 2018. However, in terms of revenue, the company was not doing well. On one hand, where the revenue of the company was ₹55 crores in 2018 it dropped down to ₹20 crores in 2023.
The impact of the same was reflected in their share price too during the period.
But on June 09, 2022, something interesting happened when the company split the share in the ratio of 10:1. That took per share price to ₹10.15.
Before this stock split, SEBI received multiple complaints against this company on the SCORES portal where the complainants mentioned that there was a huge manipulation in the stock price post multiple videos published on Youtube channels.
Later it was found that Arshad Warsi was promoting the same stock hence he was also involved in the scam.
SEBI’s Investigation
To check this SEBI took a period of 6 months and checked the activity of a few accounts trading and investing in these stocks between April 2022 – September 2022.
During their investigation, SEBI found that the stock price which was trading around ₹10.15 on June 10, 2022, rose to ₹33 per share on August 12, 2022, and later dropped to ₹17.70 by September 30, 2022.
Just in 3 months, the stock price grew by 300% first and then dropped to 50% of its value. The clear case of Pump & Dump.
This change in trend happened when 5 videos were published on two channels The Advisors & The Moneywise in July 2022. Both these channels were owned by the same person Mr. Manish Mishra.
Not limited to this, these videos were then run as an Ad on other YT videos which generated a total views of 3 crores. Now even if 50% of people have taken action then also it came out to be 1.5 crores.
That’s a huge estimation and a small investment by investors was enough to increase the stock price
But what was there in the video that led to that much manipulation?
The so-called influencer in the video talked about the company,its growth by mentioning points like:
- Fundamentally & Technically Strong Company
- Adani Group is going to Buy this company
- It would soon get Film Contracts.
Now, these many points are enough for any retail trader to put their capital in the company’s share.
What’s more surprising is that when SEBI interrogated Mr. Manish who spent ₹4 crores in YouTube ads about whom he received that amount, the name came out Abhay Singh and still there is no idea who this person was.
How Arshad Warsi Was Involved?
In its investigation, SEBI found that the famous actor Arshad Warsi was also involved in the promotion of the stock.
From this scam, Arshad Warsi earned ₹29.43 crores and his wife earned ₹37.56 crores
Later it was concluded that 5 promoters Saurabh Gupta, Pooja Aggarwal, Shreya Gupta, Gaurav Gupta, Arpan Gupta, and Varun Media Pvt Ltd were involved in the pump and dump of shares.
SEBI’s Action Against Violators
- Since it was a violation of PFUTP (Prohibition of Fraudulent & Unfair Trade Practices), SEBI banned everyone who was involved in the scam from any investment in the stock market.
- Also, it asked everyone to deposit the capital of ₹42croes that was earned illegally to be deposited in the Escrow Account of SEBI.
- Further, both the Youtube channels that promoted the stocks were banned.
Arshad Warsi Reached out to SAT!
After the SEBI order, Arshad Warsi reached out to SAT. He put his point forward and justified no involvement in the scam or promotion of the stock in any video.
SAT later removed the ban that SEBI put on him.
What Lesson This Scam Left for You All?
Generally, watching a YouTube video, reels on Instagram, and News influence people to put their money in the stock blindly. But before taking any such step one must always remember no one would be taking responsibility for your losses.
Hence,
- Validate all the details that you came across on social media or other platforms.
- Don’t follow your influencer or favorite actor blindly.
- Always do your research completely.
- Don’t trust any NEWS
