Read why Securities Appellate Tribunal granted relief to Naman Broadcasting in Sadhna Broadcast stock manipulation case

Sadhna Broadcast stock manipulation case

Securities Appellate Tribunal: The present appeal is filed under Section 15-T of Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) to set aside order dated 29-5-2025, the Bench of P.S. Dinesh Kumar, J. (Presiding Officer), Meera Swarup (Technical Member), and Dr. Dheeraj Bhatnagar (Technical Member) set aside the impugned order against Naman Broadcasting Telecommunications (P) Ltd., one of the participant companies alleged to contravene the provision of SEBI Act, 1992 and the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations 2003. Subsequently, the Tribunal remitted the matter back to SEBI’s Whole-Time Member (WTM) for fresh consideration.

SEBI received complaints from a whistleblower between July to September 2022, alleging price manipulation and subsequent offloading of shares in the scrip of Sadhna Broadcasting Limited (SBL). The complaints also stated that YouTube videos were being uploaded with false content to lure investors and a paid marketing campaign worth crores was undertaken to make the videos reach a wider audience. The whistleblower also provided links to YouTube videos, names of YouTube channels, and upload dates.

SEBI examined the complaints and prima facie found that net sellers in the shares of SBL were connected to the creator of YouTube channels, wherein videos with false content and unrealistic target price for the scrip were uploaded with the intention to influence and induce public investors to invest in the scrip. Search and seizure operations were conducted at the premises of 15 noticees wherein various documentary and electronic evidence were gathered and statements of various noticees were recorded on oath.

Based on the findings, an Interim Order was passed against 31 Noticees and a Show Cause Notice was issued to 64 entities, alleging manipulation in the scrip of SBL and seeking directions under Sections 11(1), 11(4), 11(4A), 11B(1) and 11B(2) of the SEBI Act, 1992.

The Show Cause Notice recorded that the price and volume of the scrip was manipulated through a coordinated scheme involving dissemination of misleading information and structured trades among connected entities, including members of the promoter group. The manipulation involved, uploading misleading videos via YouTube channels like “The Advisor” and “Moneywise”, paid promotions to increase reach, structured trading among connected accounts to create artificial volume and price and offloading shares by promoters and video creators at inflated prices.

SEBI emphasized that the pump-and-dump scheme was orchestrated by promoter-linked entities using digital platforms to mislead investors. Penalties were imposed and SEBI barred 7 noticees from securities market for 5 years and 52 others, including actor Arshad Warsi and his wife Maria Goretti, for 1 year and all noticees were directed to disgorge unlawful profits with 12% annual interest.

Feeling aggrieved by the said order, Naman Broadcasting Telecommunications Private Ltd., who was Noticee 9, filed the present appeal and submitted that the company was admitted under Corporate Insolvency Resolution Process on 24-4-2023 and was shown as noticee for several trades which the company was alleged to have made. However, it was not a noticee in the show cause notice cum interim order dated 2-3-2023.

Thus, the Tribunal after considering the submissions made by both the parties, quashed and set aside the impugned order against Naman Broadcasting Telecommunication (P) Ltd. Further, the Tribunal remitted the matter to the WTM, SEBI, for fresh consideration in accordance with law directing appellant to appear before the SEBI.

Read Also: Securities and Exchange Board of India bans actor Arshad Warsi and others in a textbook case of ‘pump and dump’ scam orchestrated through false narratives on digital media

[Naman Broadcasting Telecommunications (P) Ltd. v. SEBI, 2025 SCC OnLine SAT 401, decided on 23-7-2025]


Advocates who appeared in this case:

For Appellant: Deepriya Snehi, Advocate

For Respondent: Chetan Kapadia, Senior Advocate with Mihir Mody, Yash Sutaria, Aavish Shetty, Karthik K.P., Vijay Chockalingam, Advocates (K. Ashar & Co.)

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