Hanif Shekh, a little known resident of Gujarat, is among the most wanted market manipulators on the list of the Securities and Exchange Board of India (SEBI). Under the regulatory scanner for one of the largest 'pump-and-dump' stock market operations in the last four years, Shekh is absconding from India and currently believed to be ensconced in Dubai. 

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SEBI has been tracking Shekh since 2019 but he has evaded all the summons and notices of the regulator, and is not traceable in the country. However, his social media account reveals that Shekh has been enjoying high life in Dubai, sources close to the SEBI probe told Zee Business.

Investigators believe that Shekh's market manipulation is likely to have generated illegal wealth to the tune of around Rs 1,000 crore to Rs 1,500 crore, and he is alleged to be the kingpin behind hundreds of entities that were involved in rigging share prices of 50-70 company stocks. According to the sources, these are estimates of the gains based on SEBI's ongoing probe, past orders and the pending adjudication proceedings against Shekh and hundreds of entities connected to him. Investigators also believe that Shekh has managed to transfer the bulk of his wealth to Dubai through hawala channels (money mules). SEBI's investigations into Shekh's operations are still ongoing and interim orders have been passed in a few matters where the regulator was able to reach some conclusion, sources said.
  
Shekh's racket involved sending bulk SMSes and circulation of stock tips through websites to attract gullible investors and dump his holdings through multiple front entities later when the scrips caught the fancy of the investors. SEBI's investigations have found that Shekh created fake SMS IDs closely resembling prominent equity broking companies like Zerodha and ICICI Securities and used them to send bulk phone messages with 'buy' recommendations to entice small investors while entities connected to him dumped shares in the market.

In the view of SEBI whole-time member SK Mohanty, "Entire operation was run by the kingpin Hanif Shekh with best of care to deceitfully hoodwink and delude the normal eyes. As a consequence of which Mr. Hanif Shekh along with his connected entities and promoters of some companies generated wrongful gains."

In 2019, Zee Business had first highlighted how few small company shares were being manipulated by sending bulk SMSes to retail investors.

Shenanigans of Shekh

His racket first came to light a few years ago when SEBI started receiving several investor complaints against high operator activity in some of the small company stocks on its online grievance platform SCOREs. SEBI's initial probe suggested that the operation involved stock tips through bulk SMSes. After examining the prima facie evidence, SEBI started its detailed investigations. 

SEBI's recent probe order against Shekh shows there were 226 entities under his network. The regulator has also recovered multiple bank accounts and fund transfers in Ahmedabad, Mumbai and Kolkata. This apart, SEBI has tumbled up on SMS compilations, forex bills, trading logs, Gmail links, call data record (CDR) and also his links to few promoters of the small companies.

Kasambhai Shekh, Hasina Kasambhai Shekh, Robert Resources, Econo Trade India, Econo Broking (Erstwhile Bansal Finstock) and Sai Metaltech LLP are a few key entities directly linked to Shekh and his family, as per SEBI investigations.

Experts say Shekh's market operation could easily be among the few large illegal schemes to have been unearthed by SEBI since it passed orders in the infamous Global Depository Receipt (GDR) scam.

"Shekh is another of the big fraudsters like the infamous Arun Pancharia of the GDR fraud worth thousands of crore where share price was inflated first and then operator holding was dumped in the market, all in the name of issuing fancy instruments. Although SEBI passed orders in the GDR scam after months and years of painstaking investigations, major recovery from the scamsters is lacking," a source close to the regulator's office said.

Flamboyant lifestyle

 

www.midcapgains.in" and "www.mbstocks.in". The payments for development and maintenance of these were all linked to Shekh controlled entities. and a HDFC Bank account number 50200027909681, as per SEBI's order.

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