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The Securities Appellate Tribunal (SAT) on Friday reserved its order in a case involving manipulation of stocks through dubious YouTube videos. The tribunal also objected to Securities and Exchange Board of India’s (Sebi’s) move to freeze bank accounts of alleged violators.
In an ex-parte order issued on March 2, had barred a total of 31 entities, including actor Arshad Warsi, for alleged stock manipulation of micro-cap company Sadhna Broadcast.
The counsels representing Warsi, while denying the allegations, argued that they did not appear in any of the YouTube videos nor did they promote them. However, they did affirm the connection with YouTube channel operator Manish Mishra.
His counsels also requested for the defreezing of the bank accounts. In its order, Sebi had directed that no debits were to be made from the bank accounts without its permission.
Warsi’s counsel argued that the freezing of accounts should be done only as a last resort or measure.
“Provisional attachment must be based on credible information that the attachment is necessary. The opinion cannot be formed on the basis of wishful thinking,” the counsel said.
“For Rs 75 lakh, you can freeze an account? Is that a proper justification?” questioned the bench.
While Sebi argued that the freezing of the account is temporary, the bench said that it should not be allowed even for a day.
Meanwhile, the Sebi counsel argued that the appellants were a part of the group that bought shares before the videos were published and thus participated as “volume creators”.
“They purchased more shares in the second phase which they claimed that they have not sold… they could not sell the shares because of the Sebi order, which led to a fall in share prices,” said counsel representing Sebi.
In its order, Sebi had named the company’s promoters, YouTube channel operators, Warsi and his wife Maria Goretti Warsi, among others, for their alleged role in a ‘pump-and-dump’ scheme by spreading fictitious information.
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First Published: Fri, March 17 2023. 14:13 IST
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