The five companies referenced in the order are Mauria Udyog Ltd., 7NR Retail Ltd., Darjeeling Ropeway Company Ltd., GBL Industries Ltd. and Vishal Fabrics Ltd.
Sebi has issued impounding orders for about ₹126 crore toward wrongful gains these entities made through market manipulation.
The regulator has issued show cause notices to 226 entities including numerous mule accounts, for securities law violation and has indicated a possible requirement of disgorgement of ₹144 crore from them.
Sebi said the modus operandi followed apparently under a pre-planned scheme by the entities mainly centered 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 entities that are apparently mule or conduit entities to operate the fraudulent scheme in these scrips, the regulator said.
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, followed by circulation of buy recommendations via bulk SMSs in the five scrips by the SMS sender, one 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 offloaders sold the shares of these five scrips, previously acquired by them, at elevated prices thereby making substantial profits that were transferred through multiple layers and conduits to the ultimate beneficiaries of the scheme who were identified as promoters of some of the companies and Shekh, the mastermind of the scheme.