SEBI issues recovery notice in Sadhna Broadcast manipulation case

The Enforcement Action

The Securities and Exchange Board of India (SEBI) has moved to recover money it says is owed in one of the most closely watched market-manipulation matters of recent years. Through a notice of demand issued under Recovery Certificate No. 9274 of 2026, dated 31 July 2026, SEBI's recovery machinery has called on High Spirits Sales Agencies Pvt. Ltd. (PAN AACCH3216L) to pay the sums due against it in the matter of Sadhna Broadcast Limited. The notice, published on the regulator's enforcement pages, is a formal step in enforcing a demand that already exists on the record.

The recovery flows from SEBI's final order dated 29 May 2025, in which the regulator held that Sadhna Broadcast's shares had been manipulated through a coordinated pump-and-dump scheme and barred a large group of connected entities from the securities market. High Spirits Sales Agencies was one of the entities named in that order; it was directed to pay a penalty and, as a connected entity, fell within the group SEBI found to have participated in the scheme. When such a demand is not paid, SEBI issues a recovery certificate and the recovery officer proceeds to collect.

A notice of demand is not a fresh finding of wrongdoing. It is the enforcement of a liability the final order already created, and it typically precedes steps such as attachment of bank accounts, demat holdings or other assets if the amount stays unpaid. The entity named in the latest notice has not publicly responded to it. Several noticees contested SEBI's findings during the original proceedings, and the final order itself remains appealable to the Securities Appellate Tribunal (SAT).

How the Scheme Worked

According to SEBI's final order, the manipulation of Sadhna Broadcast Limited (SBL) ran in two coordinated prongs during 2022. In the first, a set of connected entities traded among themselves in the low-liquidity scrip, and those trades - 'small in volume' but landing on a thinly traded counter - pushed the price up out of proportion to their size. The order records that the share climbed from about Rs 2.50 to Rs 13.05 between April and July 2022, a rise of more than 400 per cent.

In the second prong, misleading videos were circulated on YouTube. The order describes channels including 'The Advisor', 'Moneywise' and 'Profit Yatra', operated by the person SEBI named as Manish Mishra, carrying promotional content that made extravagant claims about the company and dangled targets of Rs 300 to Rs 400 a share to draw in retail buyers. As the videos spread, the order notes, ordinary investors piled in: the number of public shareholders in SBL swelled from roughly 885 in March 2022 to about 72,509 a year later.

That surge of retail buying is what the connected group is said to have exploited. According to the order, as prices and volumes rose on the back of the videos, the manipulating entities and promoters offloaded their holdings into the demand they had helped manufacture. Promoter holding fell from 40.95 per cent to 25.58 per cent over the period, and the price later collapsed, leaving latecomers holding shares worth a fraction of what they had paid. This is the textbook shape of a pump-and-dump: inflate, publicise, distribute, exit.

Procedurally, SEBI moved through an interim stage before the final order. The regulator investigated the trading and the promotional content, issued show-cause notices to the noticees, and then, on 29 May 2025, passed the final order confirming its findings, imposing penalties and directing the disgorgement of unlawful gains with interest. The recovery certificates now being issued, including RC No. 9274 of 2026, are the collection stage of that same matter.

The Law Invoked

SEBI's final order rests on its anti-fraud powers. Per the order, the regulator invoked Sections 11(1), 11(4) and 11B of the SEBI Act, 1992 - the provisions that let it investigate, issue directions, restrain entities from the market and order remedial measures - together with the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, 2003. Within PFUTP, the order cites Regulations 3(a) to (d) and 4(1) and 4(2), which prohibit dealing in securities through fraudulent or manipulative devices and specifically bar market manipulation, misleading statements and the artificial creation of price or volume.

The monetary penalties were imposed under Section 15HA of the SEBI Act, the provision that penalises fraudulent and unfair trade practices. Disgorgement of unlawful gains, with interest, was directed under the same remedial powers, with the money to be routed to SEBI's Investor Protection and Education Fund.

The recovery step now under way draws on Section 28A of the SEBI Act, which imports tax-style recovery tools. It lets SEBI's recovery officer issue a recovery certificate and, if a demand goes unpaid, attach and sell property, freeze bank and demat accounts and appoint a receiver. RC No. 9274 of 2026 and its notice of demand are exercises of exactly that power.

What Happens Next

The notice of demand gives the entity the opportunity to pay what is due. If it does not, the recovery officer can escalate under Section 28A - attaching bank accounts, demat holdings and other assets, and selling them to satisfy the certificate. Recovery proceedings run in parallel with, and independent of, any appeal.

On the underlying findings, the route is the Securities Appellate Tribunal. A SEBI final order can be challenged before the SAT within the prescribed period, and from there, on questions of law, before the Supreme Court. Any noticee who believes the finding or the penalty is wrong may take that route; unless and until an order is stayed or set aside, it stands and is enforceable, which is why recovery can proceed alongside it.

It is worth stating plainly that SEBI's findings are the conclusions of a regulator in a quasi-judicial proceeding, appealable to the SAT, not criminal convictions. The recovery notice enforces a civil demand; it does not add any new determination of guilt.

What It Means

For ordinary investors, the Sadhna Broadcast matter is a case study in how a modern pump-and-dump is built, and how to avoid being the exit liquidity. The two ingredients SEBI describes are a thinly traded small-cap where a little coordinated buying moves the price a lot, and a promotional push - here, YouTube videos with eye-catching price targets - timed to pull in retail buyers just as insiders sell.

The practical defences are unglamorous but effective. Be sceptical of any video, message or tip promising a specific multiple on a little-known stock; SEBI-registered research analysts and investment advisers do not guarantee returns, and their registration can be checked on the SEBI website before you act. Treat sudden, unexplained price spikes in low-volume counters as a warning rather than an invitation. And remember that the person loudly promoting a stock may be the very person selling it to you.

The recovery stage matters too. Barring an entity and imposing a penalty is one thing; actually clawing the money back is another, and Section 28A recovery certificates are how SEBI turns an order into collected rupees that can flow to the Investor Protection and Education Fund. The notice against High Spirits Sales Agencies is a reminder that enforcement does not end when the headline order is passed.

FAQ

What exactly did SEBI do in this notice?

SEBI issued a notice of demand under Recovery Certificate No. 9274 of 2026, dated 31 July 2026, calling on High Spirits Sales Agencies Pvt. Ltd. to pay the sums due against it in the Sadhna Broadcast Limited matter. It enforces the earlier final order dated 29 May 2025; it is a collection step, not a new finding of wrongdoing.

Does the recovery notice mean the entity is guilty of a crime?

No. SEBI's order is a regulator's finding in a quasi-judicial proceeding, not a criminal conviction, and it is appealable to the Securities Appellate Tribunal. The recovery notice simply enforces the civil demand that order created. Any affected party retains its right of appeal, and an order stands as enforceable unless it is stayed or set aside.

What was the Sadhna Broadcast scheme SEBI described?

Per the final order, connected entities traded among themselves to inflate the price of a low-liquidity stock while misleading YouTube videos promoted it to retail investors, who bought in as insiders sold. The share rose from about Rs 2.50 to Rs 13.05 between April and July 2022 before falling sharply.

Can a SEBI order like this be appealed?

Yes. A SEBI final order can be challenged before the Securities Appellate Tribunal within the prescribed time, and on points of law before the Supreme Court. Recovery can still proceed unless the order is stayed, because an unappealed or unstayed order remains enforceable.

How can I check if a stock tip or adviser is genuine?

Verify whether the person is a SEBI-registered research analyst or investment adviser using the registration lists on the SEBI website, and be wary of anyone guaranteeing returns or naming specific price targets. Registered professionals cannot promise profits, and unregistered tips carry no accountability.

Where can I read the official record?

The recovery notice is on SEBI's enforcement pages, and the underlying final order dated 29 May 2025 is published in SEBI's orders section. Both are linked in this report.

This report is based on SEBI's notice of demand under Recovery Certificate No. 9274 of 2026 and the final order dated 29 May 2025 in the matter of Sadhna Broadcast Limited, both published on SEBI's official enforcement pages.