SEBI Penalises Three ₹20 Lakh For Manipulating Akash Infra Stock Through Telegram Channels

The Securities and Exchange Board of India (SEBI) has imposed a joint and several penalty of ₹20 lakh on three individuals for orchestrating a scheme to circulate misleading stock recommendations through Telegram channels to influence trading in the shares of Akash Infra-Projects Limited (AIPL).

At the same time, the regulator dropped proceedings against the remaining ten noticees, including the company's promoters, directors, consultants, and certain net sellers, after finding insufficient evidence to link them to the alleged manipulative scheme.

Holding that the three acted in coordination, Adjudicating Officer Amit Kapoor observed:

"From the facts established above, it is evident that Noticees 6, 7 and 8 acted in a coordinated manner to execute a manipulative scheme. Noticee 6 initiated the chain by forwarding specific stock recommendations and instructions to Noticee 7. Noticee 7 then acted as an intermediary to pass these directions to Noticee 8. Finally, Noticee 8 used his Telegram channels to broadcast these buy recommendations to the public. This synchronized dissemination of information was explicitly designed to induce public investors into purchasing the scrip of AIPL."

SEBI investigated suspected market manipulation in the AIPL scrip between November 1, 2021 and July 1, 2022 to examine possible violations of the SEBI Act, 1992 as well as the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003.

After completing its investigation, the regulator initiated adjudication proceedings against 13 noticees for alleged violations of the SEBI Act and the PFUTP Regulations. Show cause notices were issued, and the noticees were given an opportunity to respond and be heard.

The adjudicating officer said the primary issue was whether Amesh Surajlal Jaiswal, Jalaj Agarwal and Arvind Shukla had posted buy recommendations relating to the AIPL scrip on Telegram channels.

The order records that buy recommendations for AIPL were repeatedly circulated on several Telegram channels between February 11 and February 18, 2022. In all, nine different recommendation messages were circulated 29 times to induce investors to buy the scrip.

"I note that recommendation posts were inducing the subscribers of Telegram Channels to buy the shares of AIPL within a price range of 196/- *210/-. Also, the recommended price to buy shares of AIPL increased with each subsequent day of recommendation post in Telegram Channels.," the officer noted.

Examining the contents of the messages, the officer found they created a false impression that AIPL was performing exceptionally well.

"...these statements were falsely creating an impression that the scrip of AIPL was doing extremely well so as to induce the subscribers of the Telegram channels.", the order notes

To establish coordination among Jaiswal, Agarwal, and Shukla, SEBI relied on call detail records and WhatsApp chats. The investigation found 742 phone calls between Jaiswal and Agarwal between January and March 2022, besides WhatsApp exchanges. It also found 71 phone calls between Agarwal and Shukla during the relevant period.

The order further records that Shukla admitted operating five Telegram channels, namely Sure Means Sure, Intraday Share Trading Equity Stock, Intraday Trading Equity Stock, BankNifty Calls and Intraday Share Trading Stock, through which the recommendations were disseminated. He acknowledged that Agarwal had approached him to post the stock tips on these channels and said he received between ₹20,000 and ₹30,000 a day as commission for doing so.

SEBI also found that the Telegram campaign coincided with a sharp rise in trading activity. During the ten days before the recommendation phase, only 508 unique entities traded in the AIPL scrip. That figure rose to 6,690 unique entities during the recommendation phase.

According to the order, both the trading volume and the share price increased on the days the Telegram recommendations were circulated.

Based on the material before him, the adjudicating officer concluded that Jaiswal, Agarwal and Shukla had acted in coordination to disseminate misleading buy recommendations through Telegram channels, thereby influencing the price and trading volume of the AIPL scrip.

The allegations against the remaining ten noticees, however, were not sustained. The regulator said there was insufficient evidence to establish their involvement in the scheme.

Accordingly, SEBI imposed a joint and several penalty of ₹20 lakh on Jaiswal, Agarwal and Shukla