Sebi bars 222 individuals, entities for 'manipulation' in five companies
Mumbai, Jul 2, 2026
The regulator imposed penalties of Rs 47.7 crore and ordered disgorgement of illegal gains after finding large-scale price and volume manipulation, with promoters allegedly involved in some cases
The Securities and Exchange Board of India (Sebi) has barred 222 individuals and entities from the market for four to seven years for alleged pump-and-dump schemes in five companies, including Mauria Udyog, Vishal Fabrics, 7NR Retail, GBL Industries, and Darjeeling Ropeway.
The market regulator has also imposed a total penalty of ₹47.7 crore on the entities.
Other entities barred by the market regulator include the volume creators, price influencers, operators, offloaders, and in certain cases promoters and connected entities of the firms.
Sebi has also ordered the disgorgement of illegal or wrongful gains by the manipulators in the large-scale scheme carried over for several years. The regulator had issued an interim order in the matter in June 2023.
In the 394-page final order, Sebi has identified one Hanif Shekh as the mastermind and one of the ultimate beneficiaries of the price and volume manipulation scheme. Shekh has been barred for 7 years and directed to pay a penalty of ₹10 crore.
The regulator noted that prior to the commencement of the manipulation, the scrips did not have any noteworthy liquidity or major corporate announcements or improvement in performance. However, in the period between 2017 and 2020 the scrips saw abnormal price and volume fluctuations — for instance significant price surge in Mauria Udyog despite loss and decline in revenue.
The modus operandi included creating artificial volume by connected entities by trading amongst themselves. After this, “buy” recommendations were sent through bulk SMSes with headers mimicking the names of leading stock brokers to create an impression of credibility and induce other investors. “Buy” recommendations on the scrips were also circulated through certain websites. The momentum and subsequent price surge enabled the offloaders to exit at inflated prices.
The offloaders also routed the gains to financiers of the trades or, in certain cases, to promoters and connected entities.
The market regulator noted that in the case of Mauria Udyog, the promoters and controlled entities were identified as ultimate beneficiaries of the unlawful gains made through the manipulation. Additionally, 62 employees of the firm were part of the scheme; they later transferred their sale proceeds to the promoters.
Goenka Business Finance, an RBI-registered NBFC, was also found to have played a prominent role in price manipulation and creation of artificial volume.
In the case of Darjeeling Ropeway Company, the promoter Himanshu Shah was provided an exit from the company at an inflated price through the scheme. Shah had taken over the company just a year before exiting through the fraudulent practice.
“A promoter using his own company to perpetrate a fraud deserves a higher quantum of penalty,” noted Sebi whole-time member Amarjeet Singh in the order.
[The Business Standard]
