Company Disclosure

Kanungo Financiers Limited (Scrip Code: 540515) received a SEBI Final Order dated June 30, 2026 regarding alleged market manipulation in five scrips including Mauria Udyog Ltd., Vishal Fabrics Ltd., 7NR Retail Ltd., GBL Industries Ltd., and Darjeeling Ropeway Company Ltd.

Scheme Overview

SEBI identified a sophisticated pump-and-dump scheme masterminded by Hanif Shekh involving 226 entities. The scheme operated through four phases: (1) artificial price-volume creation through coordinated trading among connected entities (PV Influencers), (2) circulation of buy recommendations through bulk SMSes and websites (www.midcapgains.in, www.mbstocks.in), (3) offloading of shares at manipulated prices by connected entities, and (4) layered transfer of unlawful gains totaling ₹143.79 crore to ultimate beneficiaries.

Scrip-wise Manipulation Details

  • Mauria Udyog Ltd.: 61.32% price increase and 1,638% volume spike during SMS period (Sep-Dec 2019)
  • Vishal Fabrics Ltd.: 35% price increase and 779% volume spike during SMS period (Sep-Oct 2020)
  • 7NR Retail Ltd.: Price increased from ₹16.80 to ₹193.05 (11.5 times) during manipulation
  • Darjeeling Ropeway Co.: 1,310% volume spike during abbreviated SMS period (Dec 2019)
  • GBL Industries Ltd.: 867% volume spike during SMS period (Jan 2019)

Regulatory Actions and Penalties

SEBI established violations of PFUTP Regulations and SEBI Act, imposing:

  • Market Debarment: Hanif Shekh (7 years), his controlled entities (6 years), promoters (5 years), conduit entities (4 years)
  • Monetary Penalties: ₹10 crore on Hanif Shekh, ₹2 crore each on controlled entities, ₹1 crore on promoters, ₹50 lakh on conduits
  • Disgorgement: Joint liability for unlawful gains with 12% interest from October 21, 2020
  • Payment Deadline: 45 days from order receipt to SEBI's Investor Protection Fund

Fund Flow and Beneficiaries

Complex fund trail revealed proceeds ultimately reached entities controlled by Hanif Shekh (Econo Trade, Econo Broking, Sai Metaltech, Robert Resources) and company promoters through multiple layers of conduit entities and forex companies.

Company Response

Kanungo Financiers is reviewing the SEBI Final Order with legal advisors and will take appropriate action as required under SEBI LODR Regulations. The company will make further disclosures if required.

Legal Framework

Order issued under Sections 11(1), 11(4), 11(4A), 11B(1), 11B(2) of SEBI Act, 1992 and Regulation 30 of SEBI LODR Regulations, 2015. Principle of preponderance of probabilities applied with corporate veil pierced for entities misused as facades for fraud.