NEW DELHI — The Securities and Exchange Board of India (SEBI) has imposed penalties totaling ₹2.8 crore on 18 entities and barred them from the securities market for up to five years. The ruling follows an investigation into a premeditated scheme to manipulate the share prices of Retro Green Revolution Ltd (RGRL) between September 2020 and December 2021.
The Manipulation Scheme
According to the 61-page order passed on Tuesday, the entities worked together to artificially inflate the price of RGRL’s illiquid stock to lure unsuspecting investors.
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Artificial Volume: Connected entities traded amongst themselves to create a misleading appearance of high trading activity in a “thin” stock.
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Telegram “Tips”: Once volumes were jacked up, the group circulated stock recommendations and tips through a Telegram channel to sway investment decisions.
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Role of Sanjay Choksi: The regulator identified Sanjay Arunkumar Choksi as the key figure behind the manipulation. Although no longer the official promoter, Choksi maintained control over the company, with statutory payments being made from his personal account.
Financial Penalties and Disgorgement
In addition to the market bans and the ₹2.8 crore in total penalties (ranging from ₹5 lakh to ₹50 lakh per entity), SEBI has ordered significant financial restitution:
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Disgorgement: 15 of the involved entities must disgorge unlawful gains totaling ₹2.94 crore.
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Interest: The disgorged amount carries a 12% annual interest rate, calculated from December 31, 2021, until the date of payment.
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Deadline: The funds must be deposited into SEBI’s Investor Protection and Education Fund within 45 days.
Regulatory Findings
Quasi-Judicial Authority Santosh Shukla noted in the order that the entities violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms. The regulator found that the Choksi Group exploited influence for personal gain by offloading illiquid shares to general public investors who were misled by the artificial volume and social media tips.
