Capital market regulator SEBI has imposed an impounding order of about ₹126 crore on 135 entities for alleged manipulation in small-cap scrips Mauria Udyog, 7NR Retail, Darjeeling Ropeway Company, GBL Industries and Vishal Fabrics.
The regulator, through an interim direction, restrained these 135 entities from accessing the securities market till further orders.
SEBI had conducted an investigation into the alleged manipulation of five shares and based on the findings issued the impounding orders for wrongful gains made by 135 entities for indulging in market manipulations.
SEBI has issued a show-cause notice against 226 entities, including numerous mule accounts, for prima facie violations and indicating a possible requirement of disgorgement of ₹144 crore from them.
The modus operandi followed apparently under a pre-planned scheme by the entities mainly centred around circulation of bulk SMSs in five scrips with a buy recommendation to public investors.
The scheme involved three major sets of entities, namely PV (Price Volume) Influencers, SMS Sender and Off Loaders, apart from using a large number of mule or conduit entities to operate the fraudulent scheme in these scrips, said SEBI.
As per the first leg of the scheme, PV Influencers were found to have increased the price and volume of the five scrips through inter se manipulative trades. This was followed by circulation of buy recommendations via bulk SMSs in the five scrips by the SMS Sender, Hanif Shekh, who was prima facie the mastermind behind the scheme to lure public investors into buying such scrips.
In the last leg of the scheme, the Off Loaders sold the shares of these five scrips (previously acquired by them) at elevated prices, thereby making substantial profits which were transferred through multiple layers and conduits to the ultimate beneficiaries of the scheme — identified as promoters of some of the companies and the mastermind of the scheme, Shekh.
SEBI has taken numerous steps to investigate the matter, including using digital footprints, CDRs (call detail records), voluminous bank transactions, etc. to identify the entities involved in such illegal activities. The action on SEBI’s part has led to discovery of crucial evidence in the matter, it said.