Sadhna Broadcast case: Sebi issues new showcause to Arshad Warsi, wife

Move could spell trouble for actor Warsi as investigation finds chats around stock manipulation

The Securities and Exchange Board of India (Sebi) has issued a fresh showcause notice to actor Arshad Warsi (pictured), wife Maria Goretti, brother Iqbal Warsi, and manager Aahuti Mistry in the pump and dump scheme in the scrip of Sadhna Broadcast (SBL) through YouTube Channels.

In the fresh notice, seen by Business Standard, Sebi has named a total of 61 entities, including promoter group entities of SBL, alleging wrongful gains of Rs 59.77 crore.

Through the showcause notice, issued in December 2023, the market regulator has revised the amount of unlawful gains made by Warsi to Rs 41.7 lakh from Rs 29.43 lakh in the interim order. The amount of wrongful gains by his wife has been revised to Rs 50.35 lakh while that for his manager Mistry are around Rs 57.83 lakh.

The watchdog has submitted WhatsApp chats with Manish Mishra, who operated the YouTube channels, along with details of trades. “The initial amount of Rs 25 lakh each in the bank accounts of Arshad Warsi, Maria Goretti, and Iqbal Warsi was deposited by Manish Mishra. Thereafter, Manish used to instruct Arshad Warsi (who was also acting on behalf of Maria and Iqbal) on trades to be executed, including those in the scrip of SBL,” notes the showcause.

Emailed queries sent to Sebi remained unanswered. Messages sent to Warsi did not elicit any response till the time of going to press.

“...it was evident that both Aahuti Mistry and Arshad Hussain Warsi were aware of the scheme being orchestrated by Manish Mishra. By trading on the instructions of Manish Mishra, they aided and abetted Manish Mishra in executing his pump and dump scheme in the scrip of SBL,” it adds.

It couldn’t not be ascertained if the Warsi family has submitted any response on the showcause yet.

The couple had received interim relief last year in March from the Securities Appellate Tribunal (SAT). The tribunal had then set aside the Sebi order debarring the couple from the securities market and instead directed them to deposit 50 per cent of the alleged wrongful gains in an escrow account.

The tribunal had directed Sebi to complete the probe within six months.

In the interim order, Sebi had barred a total of 31 players from the securities market for alleged manipulation. 

As per Sebi, the modus operandi involved buying thinly-traded stocks of SBL before publishing videos disseminating false information on possible deals, financials, growth prospects, and expansions.

These trades created an unnatural rise in prices. Once unsuspecting investors entered the scrip, the entities allegedly offloaded their holding at an inflated price.