Misleading YouTube videos backed by paid marketing campaign worth crores to manipulate scrip

NEW DELHI: The recent uncovering of misleading YouTube videos being used to manipulate stock prices came after the Securities and Exchange Board of India received certain complaints wherein it was alleged that there was price manipulation and offloading of shares by certain entities in the scrip of Sadhna Broadcast Limited.

The said complaints alleged that misleading YouTube videos with false content, backed by paid marketing campaign worth crores of rupees for additional reach, were being uploaded to lure investors. Once these unsuspecting investors entered the scrip, the said entities allegedly offloaded their holding at an inflated price, the SEBI order found.

As per its Annual report, Sadhna is engaged in the business of launching television channels and to carry out the business of T.V. news, films, music, serials, etc. As per the Shareholding pattern for March 2022 available on BSE website, the promoters of the company were Gaurav Gupta, Shreya Gupta, Pooja Aggarwal, CEO of Sadhna, Varun Media Pvt. Ltd., Tajinder Kaur and Saurabh Gupta, as per the SEBI order.

There was a spurt in the price and volume of scrip of Sadhna between April 2022 to mid-July 2022.

During the second half of July 2022, false and misleading videos (“YouTube Videos”) about the company were uploaded on two YouTube channels namely, “The Advisor” and “Moneywise”.

These YouTube videos peddled false and misleading news to recommend that investors should buy the Sadhna stock for extraordinary profits, SEBI said.

These YouTube Channels had lakhs of subscribers and the misleading YouTube videos had crores of viewership aided by promotion through paid advertising campaigns.

Subsequent to the release of the misleading YouTube videos, there was an increase in the price and trading volume of the Sadhna scrip. The volumes appear to have been contributed by large number of retail investors likely influenced by the misleading YouTube videos, the SEBI order said. During this period, certain promoter shareholders, key management personnel of Sadhna, and nonpromoter shareholders who held more than 1 per cent of shareholding in Sadhna offloaded a significant part of their holdings at inflated prices and booked profits, the order said.

The YouTube Channels - The Advisor and Moneywise - were created on July 26, 2021. The Home page of the said YouTube channels has no description about the channels or its creators.

The YouTube Channels earlier allowed only one-way communication from the creators of the channel who upload videos or post messages while subscribers and viewers can only view such video or message. Subscribers and viewers are disabled from posting any comments on the videos uploaded on the said channels. (IANS)

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