Pump-and-dump operation: Sebi bans 221 entities for up to 7 years

PTI New Delhi

The Securities and Exchange Board of India (Sebi) has barred 221 entities, including individual investor Hanif Shekh, from the securities market for up to seven years and levied a fine of ₹10 crore for orchestrating a large-scale pump-and-dump operation in five stocks between 2017 and 2020.

Mauria Udyog Ltd, 7NR Retail, Darjeeling Ropeway Company, GBL Industries, and Vishal Fabrics Ltd were the scrips manipulated by Shekh—the alleged mastermind in the case—and his conduit entities, Sebi said in the order passed on Tuesday.

In its 394-page final order, Sebi found that Shekh hatched a fraudulent scheme involving over 200 seemingly disparate but intricately connected entities as "PV Influencers," "Collaborators," or "Offloaders" to transfer unlawful gains to the promoters of the companies or entities controlled by him. According to the regulator, the entities artificially inflated prices and trading volumes through synchronised trades, circulated bulk SMS recommendations to lure unaware investors, and later offloaded shares at elevated prices. These proceeds were routed through multiple conduit entities to conceal the ultimate beneficiaries.