SEBI noted that Arshad Warsi has made a profit of ₹29.43 lakh and his wife has made a profit of ₹37.56 lakh. file
SEBI on March 2 barred 31 entities, including actor Arshad Warsi, his wife Maria Goretti and promoters of Sadhna Broadcast, from recommending investors to buy shares of the company in a case related to the uploading of misleading videos on YouTube channels from the securities market.
The promoters of the company who have been barred from the securities market for their involvement are Shreya Gupta, Gaurav Gupta, Saurabh Gupta, Pooja Agarwal and Varun Media.
In addition, the regulator has seized illegal gains of ₹41.85 crore made by entities after misleading videos were uploaded on YouTube channels.
SEBI noted that Arshad Warsi has made a profit of ₹29.43 lakh and his wife has made a profit of ₹37.56 lakh.
The order came after the Securities and Exchange Board of India (Sebi) received some complaints alleging price manipulation and selling of shares by certain entities in the stock of television channel Sadhna Broadcast.
The complaints alleged that misleading YouTube videos were uploaded with false content about the company to lure investors.
Subsequently, the regulator conducted an examination during April-September 2022 and found a jump in the price and volume of Sadhana’s scrips 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”.
SEBI in its interim order said that these YouTube videos spread false and misleading news so that investors should buy Sadhna stock for extraordinary profits.
After the release of the misleading YouTube video, the price and trading volume of Sadhna scrip increased.
The volume appears to have been contributed by a large number of retail investors, possibly swayed by the misleading YouTube video.
During this period, some of the promoter shareholders, key management personnel of Sadhna and non-promoter shareholders sold a significant portion of their holding at inflated prices and booked profits.
One of the misleading videos on these YouTube channels was that Sadhna Broadcast Limited was being acquired by Adani Group. The company’s margin will increase after the deal.
In addition, there were other videos such as the company moving from TV production to film production and a large American corporation signing a ₹1,100 crore contract to produce four religious films, in which the money would be brought in by an American investor but The rights will remain with Sadhna.
SEBI has classified these 31 entities into categories – Creator of YouTube channels (Manish Mishra), Net Seller/Promoter and Profit Maker (NS), Volume Creator (VC) and Information Conveyor (IC).
Arshad Warsi and his wife come under the category of volume creators.
SEBI noted that these 31 entities collectively helped generate trading volume and interest in the scrip, spread false and misleading YouTube videos, and thereby induced unsuspecting investors to buy Sadhna scrip at higher prices, thereby Prima facie there was violation of the provisions of PFUTP (Prohibition of Cheating and Unfair Trade Practices) Rules.
Collectively, NS and some VCs have made extraordinary profits as a result of this scheme.
“I note the detailed methodology adopted by the recipients of the notice [31 entities] Including the egregious abuse of blatantly false and misleading YouTube videos that have led to a massive increase in the number of small shareholders [from 2,167 to 55,343 shareholders]In his 58-page order, Sebi whole-time member Ananth Narayan Ji said, who bought shares at an inflated price from net sellers and volume creators who received the notice.
Accordingly, the regulator has barred these 31 entities from “buying, selling or dealing in securities in any manner, directly or indirectly, until further orders”.
Further, all entities have been directed not to dispose of any asset, movable or immovable, including money lying in bank accounts, without the prior permission of SEBI, unless the amount deposited in the escrow account is credited.