Mahadev app case: ED conducts searches in several cities; seizes cash, securities worth crores
The Directorate of Enforcement (ED) last week conducted searches at various premises located in Delhi, Mumbai, Indore, Ahmedabad, Chandigarh, Chennai and Sambalpur (Odisha) under the provisions of Prevention of Money Laundering Act (PMLA), 2002, in Mahadev Online Book Betting App case, according to official sources.
The searches conducted on April 16, resulted in seizure of cash amounting to Rs 3.29 crore, freezing of securities/bonds/DEMAT accounts worth more than Rs 573 crore, besides seizure of various incriminating documents and electronic records.
ED investigations have revealed that M/s Mahadev Online Book Betting App (which is an umbrella syndicate arranging online platforms for enabling illegal betting websites to enrol new users, create user IDs) have generated, derived and obtained huge amount of Proceeds of Crime (POC) and such POC was laundering through a complex web of benami Bank accounts.
The probe also found that funds/POC generated by these betting platforms was being transferred out of India and later deployed in Indian stock market in the name of “foreign FPIs” (which are based out of Mauritius, Dubai etc).
The funds were deployed or introduced in certain companies for causing “artificial price fluctuations” of certain “SME sector securities” so as to cheat common investors. Some of these investments have been identified and frozen during searches.
Now, investigation is underway to uncover the complete modus operandi of this stock price manipulations. The seizures made during the searches have also revealed role of “promoters of such listed entities”, who have deployed these tainted funds in their company under the guise of preferential issue of shares, sale of promoters/promoter-controlled shares and issue of share warrants, ED sources said.
Some of these listed companies were also found to be used for layering the investment in share markets, they further informed.
During the searches, evidence has been recovered to suggest that the promoters of such companies collaborated/colluded with the accused persons to manipulate to share prices of such companies with the help of “tainted money” to raise their company’s valuation using a string of agents and middlemen. Some of these agents and stock brokers were also covered during the searches.
So far, the ED has conducted searches at more than 170 premises. Further, as a result of investigation, immovable and movable assets valued at approximately Rs 3,002.47 crore have been seized/ frozen /attached in the case.
ED has also arrested 13 persons in the subject case while 74 entities have been arraigned as accused in the five prosecution complaints filed in the subject matter, even as further probe is under progress, sources said.
India