Mahadev app accused deployed proceeds in stock market, firms under scanner: ED

New Delhi: Mahadev app, currently under investigation for orchestrating an online betting scam estimated to be worth around ₹6,000 crore, was deploying the proceeds of crime in the Indian stock market, the Enforcement Directorate (ED) said on Monday, while adding that promoters of some listed companies are under investigation for “stock market manipulation”.

The financial crimes probe agency made the revelation as it froze securities and bonds worth ₹573 crore after multi-city raids last week in the case. The agency had, on April 16, carried out raids on several companies and individuals in Delhi, Mumbai, Indore, Ahmedabad, Chandigarh, Chennai and Sambalpur (Odisha).

“The search action resulted in seizure of cash amounting to ₹3.29 crore, freezing of securities and bonds worth more than ₹573 crore besides seizure of various incriminating documents and electronic records,” ED said in a statement on Monday.

It added that Mahadev online book betting app (which is an umbrella syndicate arranging online platforms for enabling illegal betting websites to enroll new users, create user IDs) “have generated, derived and obtained huge amount of proceeds of crime (POC) and such POC was laundered through a complex web of benami bank accounts.”

On deploying POC into the stock market and alleged manipulation, ED said - “Investigation revealed that the POC 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, an investigation is underway to uncover the complete modus operandi of this stock price manipulation,” the agency added.

The agency further claimed that its searches have 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 or promoter-controlled shares and issue of share warrants”.

“Some of these listed companies were also found to be used for layering the investments in share markets,” the statement added.

Asserting that it has recovered evidence regarding role of promoters, ED said “promoters of such companies collaborated or 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 stockbrokers were also covered during the searches,” the agency said.

The Mahadev online betting app swindle is estimated to be worth ₹6,000 crore. The two main promoters of Mahadev – Sourabh Chandrakar and Ravi Uppal are currently located in Dubai and Indian government is pursuing their extradition. It is alleged that the accused persons ran illegal betting operations, in which people were allowed to put illegal bets on live games like poker, card games, chance games, matches of cricket, badminton, tennis and football, and even allowed access to apps to place bets on elections in India.

ED has claimed that the Mahadev app “betting empire” is still operating more than 3,200 (betting) panels in different cities which generate around ₹40 crore per day.

So far, ED has carried out searches at more than 170 locations in the country and seized, frozen or attached assets worth over ₹3,000 crore. It has also filed five charge sheets under Prevention of Money Laundering Act (PMLA) naming 13 accused persons including Chandrakar and Uppal.

Last month, the Central Bureau of Investigation (CBI) filed a case naming former Chhattisgarh chief minister Bhupesh Baghel and others as accused to probe a larger conspiracy and role of public servants in the Mahadev scandal.