Ahmedabad-Based Scammers Dupe Nearly 4,000 Investors, SEBI Probes | Profit Exclusive
The scheme was being orchestrated through a network of shell companies, and several of the accused in the case were also related to the pump-and-dump violations of LS Industries.
The Securities and Exchange Board of India is currently investigating a number of pump-and-dump schemes involving revivals of defunct BSE companies operated from Ahmedabad and duping around 4,000 investors, according to people familiar with the matter.
It is important to note here that SEBI is not looking into BSE in the matter, nor is the exchange's culpability in question as the focus is only on defunct old companies listed on the exchange by virtue of being the older exchange.
The regulator is keen on expediting the investigation and is planning on coming out with an order in the next three to six months, the people cited above said.
The scheme was being orchestrated through a network of shell companies, and several of the accused in the case were also related to the pump-and-dump violations of LS Industries Ltd., they said.
SEBI is treating the case as an important development, as it believes that the investigation is likely to lead the regulator towards more such schemes, as well as to entities involved in orchestrating them, including those involved in preferential allotment-related violations.
The major issue in these violations is their volume and hence curbing becomes a daunting task, the people said.
In a media release on Friday, the markets regulator had mentioned that it was investigating such schemes and conducting raids in the matter.
"It is hereby clarified that SEBI has conducted search and seizure operations at multiple locations in the month of June 2025, in connection with pump and dump in certain scrips and has seized incriminating evidence. Investigation in the matter is under progress," the regulator had said.
The regulator has seized mobile phones of several accused individuals and is currently going through the data it has collected, the people told NDTV Profit on the condition of anonymity.
Other Major Pump & Dump Instances
In the last one year, SEBI has come out with orders against several such entities, including Pacheli Industrial Finance Ltd., Bharat Global Developers Ltd., LS Industries and more.
In January this year, SEBI banned Pacheli Industrial Finance Ltd. and six other entities from the securities market till further orders for violations, including suspicious trades during a price rise period.
The markets regulator said that it acted on the case while the stock was still in the "pump" phase of the pump-and-dump transactions—an operation where manipulators artificially inflate a stock’s price through misleading promotions before selling off their shares, causing the price to crash and leaving other investors with losses.
In case of LS Industries, the regulator first observed an article published on NDTV Profit on Feb. 3 this year, flagging how a company with almost negligible revenue had a valuation of Rs 5,500 crore. The subsequent investigation by the regulator in the company's affairs uncovered suspicious trading patterns, misleading disclosures and transfers to an NRI.
Meanwhile, in March this year, the regulator brought out a confirmation order against Bharat Global Developers Ltd. for fake disclosures, preferential allotment of shares and other violations.
