SAT Upholds SEBI Finding Of Telegram-Linked Pump-And-Dump In Superior Finlease shares

The Securities Appellate Tribunal (SAT) at Mumbai has upheld SEBI's finding that a “pump and dump” scheme was carried out in the shares of Superior Finlease Limited through Telegram channels in September 2021.

While doing so, a coram of Presiding officer P.S. Dinesh Kumar and Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar confirmed disgorgement of unlawful gains and market debarment against Rajneesh Kumar, a director of the company, and his connected entities. It also upheld monetary penalties, including an Rs 1 crore penalty on the company's director, though the amounts were reduced in some cases.

The bench said, “In our view, strong message must go to perpetrators of fraud that, it could result in serious consequences which may deter other perpetrators from refraining from indulging fraudulent acts.”

The case followed a complaint received by SEBI after Telegram channels circulated messages recommending investors to buy Superior Finlease shares. On the day of the recommendation, September 14, 2021, the stock saw a sharp rise in price and trading volume. The price then fell steeply in the days that followed.

SEBI alleged that Rajneesh Kumar had planned the scheme by using connected trading entities to build up activity in the stock and then arranging for “buy” calls to be broadcast on Telegram.

According to the regulator, Kumar paid Rs 50 lakh to a consultant, Ashish Shah, who routed part of the money through intermediaries to a Telegram channel operator to post the recommendations. Kumar argued before the tribunal that he had not traded in the shares himself and should not be penalised.

The tribunal rejected this defence, holding that the money trail and admissions on record were sufficient. It said, “Thus, the allegation of pump and dump by giving a 'buy' recommendation in the Telegram channel through Arvind Shukla (Noticee No.5) stands proved on more than one count. Firstly, Rajneesh has paid Rs.50 Lakhs to Ashish Shah.Secondly, through two intermediaries (N3 and N4) Ashish Shah has paid Rs.8 Lakhs to Arvind Shukla (N5), who has broadcasted the buy order on his Telegram channel. All four noticees (N2 to N5) have admitted the transactions."

On penalties, the tribunal partly modified SEBI's order. The penalty on Rajneesh Kumar, who was held to be the mastermind, was reduced from Rs 5 crore to Rs 1 crore, while the directions on disgorgement and market debarment against him and his connected entities were left untouched.

The penalty on consultant Ashish Shah was reduced to Rs 50 lakh, with disgorgement limited to the amount received by him. The penalty on intermediary Kirtidan Gadhvi was cut to Rs 10 lakh, and the penalty on Jalaj Agrawal was reduced to Rs 25 lakh. The Tribunal, however, did not interfere with the Rs 50 lakh penalty imposed on Arvind Shukla, the Telegram channel operator.

Case Title: Rajneesh Kumar and Ors v. Securities and Exchange Board of India

Case Number: Appeal No. 396 of 2024

Citation: 2026 LLBiz SAT 2

For Appellants: Advocates Sanjeev Kumar Choudhary, T.R. Khare, Rupendra Porwal, Vivek Rai, Abishek Venkatraman, Robin Shah, Manish Gupta, Sahaj Choudhary, Vinay Chauhan, CS Anand Kankani and CS Muskan Kadiwar

For Respondent: Advocates Shreya Parikh, Mihir Mody, Aavish Shetty, Karthik K.P.. Vijay Chockalingam and Mr. Yash Sutaria