By Archis Chowdhury
The Securities and Exchange Board of India pulled up two companies - Sharpline Broadcast Limited, and Sadhna Broadcast Limited - for engaging in a pump and dump scheme, a type of securities fraud which involves artificially boosting stock prices through fake recommendations, and selling them off at inflated prices.
This particular scheme, according to SEBI, was carried out by influencers using YouTube videos to put out false and misleading information on the two companies to draw investors.
Among those named in the list of noticees by SEBI were actor Arshad Warsi and his wife actor Maria Goretti, who reportedly made Rs 29.43 lakh and Rs 37.56, respectively, while overall illegal gains to the tune of Rs. 41.85 crore have been impounded by the regulatory body.
Both the actors, along with the 29 other noticees have been barred by SEBI "from buying, selling or dealing in securities either directly or indirectly, in any manner whatsoever until further orders".
Additionally, SEBI named four different YouTube channels that were involved in publishing misleading information about the two companies to draw investors - Moneywise, TheAdvisor, Profit Yatra and Midcap Calls.
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The Schemers
SEBI classified the noticees as follows: Creators of the YouTube Channels - who have been classified as Misleading Message Disseminators (MMDs), Net Sellers and profit makers (NSs) - those who held shares of the companies at the start of the examination period, and Volume Creators (VCs) who bought and sold shares of the companies during the examination period, thus boosting the trading volumes and drawing interest in the scrips.
Five entities - Shreya Gupta, Gaurav Gupta, Saurabh Gupta, Pooja Aggarwal and Varun Media - were named as promoters of Sadhna, and net sellers in Sharpline.
Additionally, Warsi and Goretti were named as Volume Creators and profit makers. According to SEBI, they both purchased large volumes of shares of Sadhna Broadcast Limited, increasing the share price and trading volume, and were among those who sold off their shares at the inflated prices to make nearly Rs. 60 lakh in profit together.
SEBI further established two phone calls between Warsi and Manish Mishra, who ran the YouTube channels, and over 150 calls of over six hours of duration between Warsi and an individual named Aahuti Rasik Mistry, who has been labeled as yet another 'Volume Creator'. Furthermore, both Warsi and Goretti, along with the 29 other noticees were among those who sold their shares at inflated prices, after investors influenced by the disinformation entered the scrip.
The Scheme
Last year, SEBI received complaints of price manipulation and share dump in the scrips of Sadhna and Sharpline. "The said complaints alleged that YouTube videos with false content, backed by paid marketing campaign worth crores of rupees for additional reach, were being uploaded to lure investors. Once these unsuspecting investors entered the scrip, the said entities offloaded their holding at an inflated price," SEBI added.
The channels recommended investors to buy shares of the companies, based on false information, while promising extraordinary profits for investors. This led to in increase in price and trading volumes, fueled by retail investors who were likely influenced by the YouTube videos.
Once these investors entered the scrip, the noticees - promoter shareholders, key management personnel of Sadhna, and certain non-promoter shareholders - offloaded their holdings at an inflated price, while booking profits.
SEBI also established connections between all the noticees based on familial relationships, KYC details, common address & email IDs, call data records and fund transfers, which have been included in the two interim orders.
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Manish Mishra, The YouTuber
Named as the Noticee number 1 in both the interim orders by SEBI (you can view them here and here), is an individual named Manish Mishra, who is reportedly behind all the four YouTube channels that spread misleading information on the two companies.
Mishra was classified by SEBI as a 'Misleading Message Disseminator' (MMD), along with another individual - Manjiri Tiwari.
At the time of writing this article, BOOM found that two of the channels - TheAdvisor and Moneywise - were still active with over 1.5 million subscribers overall, while 'Midcap Calls' and 'Profit Yatra' were found to have been removed.
As per SEBI, the following disinformation was shared by the YouTube channels:
"The company (Sadhna) has 5G license. SBL is going to be taken over by Adani group. The margins of the company will increase after the deal.”
“The company (Sadhna) is moving from TV production to movie production.”
“Big Mutual funds have already bought the stock (Sadhna).”
“The company (Sharpline) is going to be taken over by Adani group since the company has license to create OTT platforms, TV channels and news channels and Adani group would like to acquire all the licenses at one go. The recent change in directorships in the company is indicative that Adani group would be taking over the company.”
"The company (Sharpline) also had large contracts owing to which company is making huge profits. The company has signed a big contract with Sony Pictures and Zee to create 4 big films and 9 web series. The company will earn approx. INR 250 crores from this deal. In the said deal, the investment will be done by Sony and Zee, but the content rights are with Sharpline Broadcast Ltd. Therefore, there is no risk to the company but will have stake in profits.”
With no further information given on Mishra in the interim orders, BOOM was unable to establish the individual's online presence.
