Blitz Bureau
NEW DELHI: India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), has barred 221 entities from the securities market after uncovering what it described as an “industrial-scale” stock manipulation scheme involving five listed companies.
The regulator has also ordered the recovery of nearly Rs 144 crore in illegal gains, along with interest, following a years-long investigation into an alleged pump-and-dump operation.
In a 394-page final order, SEBI identified individual investor Hanif Shekh as the mastermind behind the operation, which ran between 2017 and 2020.
According to the regulator, the network manipulated the share prices and trading volumes of Mauria Udyog, 7NR Retail, Darjeeling Ropeway Company, GBL Industries and Vishal Fabrics before offloading shares at artificially inflated prices to unsuspecting retail investors.
SEBI said the operation involved more than 200 entities, each playing a specific role in executing the scheme. The manipulation allegedly began with connected traders carrying out synchronised and circular trades to create artificial demand, boosting both prices and trading activity in the targeted stocks.
Once prices and liquidity had been inflated, the network allegedly launched large-scale SMS campaigns urging retail investors to buy the shares. SEBI said the messages were sent to tens of thousands of investors using sender IDs designed to resemble those of well-known brokerages, lending credibility to the recommendations and encouraging investor participation.
As retail buying increased, another group of connected entities allegedly sold their holdings at elevated prices, booking significant profits. The regulator said the proceeds were then routed through multiple layers of conduit companies.
