SEBI has barred Bollywood actor Arshad Warsi and his wife Maria Goretti Warsi from the securities market for one year due to their involvement in a pump and dump scheme involving Sadhna Broadcast Limited shares. The regulator found them guilty of market manipulation alongside 57 others.
The Securities and Exchange Board of India (SEBI) on Thursday banned Bollywood actor Arshad Hussain Warsi, his wife Maria Goretti Warsi, and others from entering the securities market for one year.
This action came after they were found involved in a coordinated “pump and dump” scheme related to shares of Sadhna Broadcast Limited (SBL).
SEBI also barred 57 other people and companies, including Warsi’s brother Iqbal Warsi, from the securities market for varying periods ranging from one to five years.
In the official order passed by SEBI Whole Time Member Ashwani Bhatia, it was stated that Arshad Hussain Warsi, his brother Iqbal, and Maria Goretti Warsi were part of the market manipulation plan led by Manish Mishra.
The order mentioned,
“It is noted that Arshad Hussain Warsi in his statement recorded before SEBI on June 27, 2023, stated that apart from placing trades in his own account, he was also trading from the accounts of his wife (Noticee 61) and brother (Noticee 62).”
The order further observed,
“I note from the screenshot of Whatsapp Chat dated July 13, 2022 between Arshad Warsi and Manish Mishra that the orders placed on the said date from the account of Arshad Warsi for purchase of 3,29,050 shares, from the account of Noticee 61 (Maria Warsi) for purchase of 3,29,755 shares, and from the account of Noticee 62 (Iqbal Warsi) for purchase of 82,625 shares of SBL, at Rs 12.08 per share, were under the express instructions of Manish Mishra.”
Earlier in March 2023, SEBI had passed an interim order barring Warsi, his wife, and others from the securities market. However, the Securities Appellate Tribunal (SAT) later limited this restriction only to the SBL shares.
SEBI’s investigation covered the period from March 8, 2022, to November 30, 2022. The probe began after SEBI received complaints between July and September 2022 about stock price manipulation in Sadhna Broadcast shares.
This manipulation was supported by misleading YouTube videos and a large paid marketing campaign.
Sadhna Broadcast Limited, listed on BSE since January 2018, operates in the television and film media business.
During the investigation period, the number of public shareholders increased sharply from 885 to 72,509, while the promoter’s shareholding dropped from 40.95% to 25.58%.
SEBI found that the manipulation happened in two stages. First, connected people made coordinated trades to create fake increases in the stock price and trading volume.
Second, promotional YouTube videos were posted, showing the company as a successful turnaround story with false claims such as acquisition by the Adani Group, owning a 5G license, and unrealistic price targets ranging from Rs 76 to Rs 340.
These videos were posted on five YouTube channels run by Manish Mishra and promoted through Google Ads. WhatsApp chats revealed Mishra giving trade instructions and coordinating with Arshad Warsi and others.
On July 13, 2022, trades from the accounts of Arshad Warsi (3,29,050 shares), Maria Goretti Warsi (3,29,755 shares), and Iqbal Hussain Warsi (82,625 shares) were executed at Rs 12.08 per share following Mishra’s directions.
SEBI observed that the Warsis only traded in stocks that Mishra manipulated. The WhatsApp messages showed discussions about receiving money and placing buy orders.
SEBI rejected their claim that they were inexperienced or unaware of the fraud, citing consistent trading patterns, fund transfers, and chat records.
The regulator found that the Warsis violated several rules under the SEBI Act, 1992, and Regulations 3 and 4 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP).
The illegal profits were calculated at Rs 41.70 lakh for Arshad Warsi, Rs 50.35 lakh for Maria Goretti Warsi, and Rs 12.61 lakh for Iqbal Warsi.
Manish Mishra was held responsible for both amounts, while Arshad Warsi was additionally responsible for the profits earned in his wife’s account.
SEBI has directed the Warsis to return their illegal gains along with 12% simple interest per year starting from November 30, 2022.
They also have to pay a fine of Rs 5 lakh each within 45 days. These amounts will be transferred to the Investor Protection and Education Fund.
Read Order:
Click Here to Read Our Reports on CJI Sanjeev Khanna
