Sadhana Broadcast scam: Sebi bans actor Arshad Warsi, his wife Maria Goretti, 57 other entities from markets for up to 5 years

Capital markets regulator the Securities and Exchange Board of India (Sebi) has barred Bollywood actor Arshad Warsi, his wife Maria Goretti, and his brother, along with 56 other entities, from the securities markets for one to five years. The case pertains to misleading videos on YouTube channels recommending that investors buy shares of Sadhna Broadcast Ltd, now renamed Crystal Business System Ltd. 

The regulator has also imposed a fine of ₹5 lakh to ₹5 crore on these entities, including the promoters of Sadhna Broadcast. Apart from this, Sebi has ordered these 59 entities to disgorge total unlawful gains of ₹58.01 crore along with 12% interest per annum from the end of the investigation period till the date of actual payment. 

Warsi, his wife, and his brother have been banned from accessing the securities market either directly or indirectly for a period of one year, according to an order passed by Sebi on Thursday. The watchdog has also slapped a fine of ₹5 lakh each on Warsi and Goretti. 

Sebi, in its order, noted that Warsi had made a profit of ₹41.70 lakh, while his wife earned a profit of ₹50.35 lakh. “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). It is further noted from the submissions of Noticee 60 that Aahuti Mistry acted as the manager of Arshad Warsi,” said the Sebi order.

According to Sebi, Gaurav Gupta, Rakesh Kumar Gupta, and Manish Mishra were the masterminds behind this operation and the ones who executed the scheme. Among others, Subhash Aggarwal, who also happened to be a director of the registrar and transfer agent (RTA) of Sadhna Broadcast; Peeyush Agarwal, a dealer at Choice Broking; and Lokesh Shah, owner of the Delhi franchise of a stockbroker, were also involved in the scam.

The regulator has imposed a penalty of ₹5 crore on Mishra, while Gaurav Gupta, Rakesh Kumar Gupta, Subhash Agarwal, Piyush Agarwal, and Lokesh Shah were fined ₹2 crore each.

The action was taken by Sebi after it received complaints during July-September 2022, which alleged that there was price manipulation and offloading of Sadhna Broadcast shares by certain entities. It was alleged that “misleading YouTube videos with false content, backed by a paid marketing campaign worth crores of rupees for additional reach, were being uploaded to lure investors”. Based on the complaint, Sebi conducted a detailed investigation into the alleged manipulation in the share prices of Sadhana Broadcast during the period from March 8, 2022, to November 30, 2022.