SEBI bans 221 entities in Rs 144 crore pump-and-dump scam, bars mastermind Hanif Shekh for 7 years

The Securities and Exchange Board of India (SEBI) has barred 221 entities from the securities market following an investigation into an alleged large-scale stock manipulation scheme involving five listed companies. According to the regulator, the operation generated nearly Rs 144 crore in unlawful gains through a coordinated pump-and-dump scheme that ran between 2017 and 2020. The targeted firms included Mauria Udyog, 7NR Retail, Darjeeling Ropeway Company, GBL Industries, and Vishal Fabrics, whose share prices and trading volumes were allegedly manipulated before being offloaded to retail investors.

Investigators stated that the network used connected traders to execute synchronised and circular trades to create artificial demand and boost liquidity. Once prices were inflated, the network allegedly sent mass SMS campaigns using sender IDs resembling well-known brokerages to trick retail investors into buying the shares. As retail buyers entered the market, connected entities sold their holdings at high prices. The proceeds were then routed through multiple layers of conduit companies and foreign exchange firms to conceal the ultimate beneficiaries.