Kathmandu: A stock trader named Dipendra Agrawal has been arrested by Nepal’s Central Investigation Bureau (CIB) for allegedly spreading false information and engaging in manipulative trading that allowed him to earn Rs 4.91 million from Joshi Hydro Power Development Company shares.
According to an investigation by the Securities Board of Nepal (SEBON), Agrawal deliberately circulated misleading claims on social media to artificially inflate the stock price. On 14 February 2024, he posted on his Facebook page that he was selling off his entire holdings in other companies—Finance, People’s Power Limited (PPL), and River Falls Power Limited (RFL)—to buy Joshi Hydro shares, claiming the price would soon reach Rs 1,000 per share.
In the same post, he wrote: “As promised to my friends, here’s what I’m doing today. I have decided to sell all my Finance, PPL, and RFL shares to buy Joshi. Will Joshi reach 1,000?” He further spread rumours that Joshi was about to issue a 65 percent rights issue, followed by another 1:2 rights issue, and that the company was acquiring a 53-megawatt hydropower project—none of which were true.
Joshi Hydro had only applied to SEBON for a rights issue at a 1:0.65 ratio based on its existing share capital. The company had made no decision regarding a subsequent 1:2 rights issue or any acquisition of a 53 MW project. SEBON’s probe concluded that Agarwal’s statements were intentional misinformation designed to mislead other investors and drive up the share price.
Agrawal had no affiliation with Joshi Hydro, yet he used false claims to create hype. After buying shares at an average price of Rs 275.74, he sold 73,307 shares at an average of Rs 342.85 following the market surge triggered by his posts. This generated a profit of Rs 67.11 per share, totalling Rs 4.91 million.
The investigation found that Agrawal’s actions violated Section 97(g) of the Securities Act, 2063, which prohibits the dissemination of false or misleading information with the intent to induce others to buy or sell securities. The report confirmed that he purchased shares before spreading the rumours, then sold them at inflated prices after the misinformation pushed the market higher.
Dipendra Agrawal remains in custody as the CIB continues its investigation into the case.
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