SEBI Cracks Down on Market Manipulation in Sadhna Broadcast Case

The Securities and Exchange Board of India (SEBI) has issued a final order in the case of Sadhna Broadcast Limited, taking stringent action against multiple entities involved in an alleged "pump and dump" scheme.  

This significant ruling, spanning 109 pages, highlights SEBI's commitment to protecting investor interests and maintaining the integrity of the securities market. 

The Manipulation Scheme in Sadhna Broadcast Case Unveiled 

As per SEBI reports, the investigation into Sadhna Broadcast Limited (now Crystal Business System Ltd) revealed a carefully orchestrated scheme to manipulate its share price. The fraudulent activity unfolded in two distinct phases: 

• Phase 1: Artificial Price Inflation: Initially, connected entities and those linked to the promoters engaged in collusive trading among themselves. These trades, though sometimes small in volume, had a significant impact on the stock's price due to its low trading activity. This created a false impression of genuine market interest and steadily inflated the share value. 

• Phase 2: Misleading Promotions: Once the price was artificially boosted, misleading and promotional videos were spread across several YouTube channels. These videos falsely presented Sadhna Broadcast as a highly promising investment opportunity, with claims that were not true. The timing of these videos was crucial, as they were released to coincide with and amplify the artificial market activity, drawing in unsuspecting retail investors. 

SEBI's Strict Action 

Following a thorough investigation, SEBI has identified and taken action against numerous individuals and entities involved in this scheme. The regulator has banned a total of 59 individuals and entities from participating in the securities market for periods ranging from one to five years. Additionally, substantial penalties have been imposed, with fines ranging from ₹5 lakh to ₹5 crore on various parties, including the company's promoters. 

Furthermore, SEBI has ordered the disgorgement of unlawful gains totaling ₹58.01 crore, along with 12% interest per annum from the end of the investigation period until the actual payment date. This means those who profited illegally from the scheme will have to return their ill-gotten gains. 

Key Players and Findings in Sadhna Broadcast Case 

SEBI's order identifies several individuals and entities who played crucial roles in planning and executing this manipulative scheme. Some individuals were found to be central to orchestrating the fraud, while others facilitated the manipulative designs or acted as information carriers. The investigation, which spanned from March 8, 2022, to November 30, 2022, unearthed evidence of these coordinated activities, including the use of misleading online content to influence public investors. 

Read more on: Best Gold ETFs in India for June 2025: SBI Gold ETF, Kotak Gold ETF, and More Based on 5Y CAGR  

Conclusion 

This final order from SEBI underscores the regulator's firm stance against market manipulation and fraudulent practices. It serves as a stern warning to those who attempt to exploit the securities market through deceptive means, reinforcing the importance of transparency and fair trading for all investors. 

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/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.