Why Arshad Warsi, his wife were banned from stock market
What's the story
Bollywood actor Arshad Warsi, his wife Maria Goretti, and his brother have been banned from the stock market for one year by the Securities and Exchange Board of India (SEBI).
The ban comes after SEBI found their involvement in a stock manipulation case related to Sadhna Broadcast Ltd (now Crystal Business System Ltd).
The regulatory body has also imposed a fine of ₹5 lakh each on Warsi and Goretti, reported PTI.
Manipulation strategy
'Pump and dump' scheme used for manipulation
SEBI has described the stock manipulation as a "pump and dump" scheme.
This involved artificially inflating the share price of Sadhna Broadcast using false information, followed by selling large amounts of shares at the inflated price.
The regulatory body found WhatsApp chats between Warsi and Manish Mishra, who was instrumental in creating this false buzz around the company.
Profit details
Warsi and Goretti's profits from the scheme
The 109-page final order issued on Thursday revealed that Warsi made a profit of ₹41.7 lakh while Goretti earned ₹50.35 lakh through these trades.
Apart from the trio, the order names 57 other entities, which have all been fined between ₹5 lakh and ₹5 crore each. They have been asked to return ₹58.01 crore in illegal profits, alongside a 12% interest/annum from the end of the investigation period until full payment is made.
Investigation findings
Misleading YouTube videos fooled the public about Sadhna's performance
The SEBI investigation, which spanned from March 8, 2022, to November 30, 2022, found that YouTube channels such as The Advisor, Midcap Calls, Profit Yatra, Moneywise, and India Bullish were used to spread misleading videos about the company's financial health and prospects.
To recall, Warsi and Goretti were barred from trading for a year back in 2023, in relation to this case.
Additional participants
Other individuals involved in the manipulation scheme
The SEBI order also identified other individuals who played key roles in the manipulation scheme.
Gaurav Gupta made the highest profit of ₹18.33 crore from this scheme, while Sadhna Bio Oils Pvt Ltd made ₹9.41 crore.
Gupta, Rakesh Kumar Gupta, Subhash Agarwal, Piyush Agarwal, and Lokesh Shah were each fined ₹2 crore.
Jatin Manubhai Shah was fined ₹1 crore.