In a major crackdown on stock market manipulation, the Securities and Exchange Board of India (SEBI) has taken strict action against 18 entities involved in rigging the share price of Retro Green Revolution Limited (RGRL). The regulator has imposed a total penalty of ₹2.8 crore and barred all entities from the securities market for five years.
Artificial Trading to Inflate Low-Liquidity Stock
According to SEBI’s order, the entities collectively created artificial demand in a low-liquidity stock, leading to an abnormal rise in its price. The strategy was aimed at attracting retail investors and offloading shares at inflated levels.
The investigation revealed that the entire operation was pre-planned and executed in a coordinated manner. Connected accounts were used to carry out repetitive trades, thereby artificially boosting both volume and price. Subsequently, stock tips and recommendations were circulated through social media platforms, particularly Telegram channels, to lure unsuspecting investors.
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Sanjay Choksi Group Behind the Manipulation
SEBI, in its detailed findings, stated that the network was operated under the leadership of Sanjay Arunkumar Choksi and his group. Although he was no longer officially a promoter of the company, effective control remained with him. Several statutory payments were found to be routed through accounts linked to him, strengthening evidence of his involvement.
The regulator has also directed 15 of the entities to disgorge illegal gains amounting to ₹2.94 crore, along with 12% annual interest from December 31, 2021, until the date of payment. The amount must be deposited within 45 days into SEBI’s Investor Protection and Education Fund.
Classic Pump-and-Dump Scheme Exposed
SEBI noted that the case is a classic example of a ‘pump-and-dump’ scheme, where stock prices are artificially inflated before being sold at higher levels for profit. Such schemes typically leave retail investors bearing the losses, as they are misled into believing the price rise is genuine.
The probe covered the period from September 1, 2020, to December 31, 2021, to determine violations under the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations. Show-cause notices were issued to the entities on November 8, 2024.
Retro Green Shares Hit 52-Week Low
Market experts believe that such regulatory actions help reinforce investor confidence and improve market transparency. They also caution retail investors against blindly following stock tips from social media or unverified sources.
On Wednesday, shares of Retro Green Revolution Limited declined by 1.49% to close at ₹1.30. During the session, the stock slipped to ₹1.28, marking its 52-week low.
Experts advise investors to thoroughly check a company’s fundamentals and rely only on verified disclosures before making investment decisions, to avoid falling prey to such manipulation schemes.
