The Securities and Exchange Board of India (SEBI) has issued a sweeping order against an alleged stock manipulation network, barring 221 entities from participating in the securities market for periods ranging up to seven years. The market regulator has also directed the recovery of ₹143.79 crore, along with applicable interest, after concluding that investors earned unlawful gains through a coordinated pump-and-dump operation spanning five listed companies.
The action follows a detailed investigation into trading activities between 2017 and 2020, during which SEBI found evidence of artificial price and volume manipulation before shares were offloaded to retail investors.
According to SEBI, the alleged operation was led by Hanif Shekh, who used a large network of connected entities to manipulate the shares of Mauria Udyog, 7NR Retail, Darjeeling Ropeway Company, GBL Industries, and Vishal Fabrics.
The investigation found that the network initially created artificial demand through synchronised and circular trades, making the stocks appear actively traded. Once prices moved higher, promotional SMS campaigns recommending the shares were circulated widely. Some messages reportedly used sender identities resembling established brokerage firms to make the recommendations appear more credible.
As retail investors entered these stocks, connected entities allegedly exited their positions at inflated prices, generating significant profits.
SEBI also traced the movement of funds through multiple intermediary entities before they allegedly reached the ultimate beneficiaries, making it difficult to identify the end recipients.
Based on its findings, SEBI directed the recovery of ₹143.79 crore in alleged illegal gains, together with 12% annual interest from October 2020 until the amount is repaid.
Hanif Shekh has been barred from accessing the securities market for seven years and fined ₹10 crore. Five entities linked to him have received six-year market bans along with penalties of ₹2 crore each. Other entities involved in the case have been prohibited from trading for up to five years and fined between ₹5 lakh and ₹1 crore, depending on their role.
The regulator said it relied on a combination of trading records, banking transactions, mobile phone data, WhatsApp communications and information obtained from telecom operators and financial institutions to establish the links between the entities.
Read more: SIP Calculator: How Investing ₹18,000 Per Month Can Grow to ₹3.42 Crore in 25 Years?
The latest order is one of SEBI's largest actions against an alleged pump-and-dump network in recent years. Beyond the monetary recovery and market restrictions, the case highlights the regulator's growing use of digital evidence and financial trail analysis to detect complex market abuse. For investors, it also serves as a reminder to exercise caution before acting on unsolicited stock recommendations, particularly those circulated through bulk messages or social media.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jul 1, 2026, 5:16 PM IST
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