The Enforcement Directorate (ED) has revealed that several dummy accounts and fake bank entities were being used to invest nearly ₹1,100 crore in the stock market as part of the ongoing investigation into the Mahadev betting app scam case.
The ED will keep these shares frozen until the investigation is completed.
Mahadev App Scam: ED Freezes Shares Worth ₹1,100 Crore
On March 8, the investigating agency said it has frozen stock market portfolios worth over ₹1,100 crore in demat accounts linked to the prime accused in the scam, Hari Shankar Tibrewal.
Key Details:
- As of February 29, 2024, Indian companies controlled by associates of Tibrewal held around securities worth ₹580 crore in stock portfolios.
- Foreign entities also invested in India via the FPI route. As of February 29, 2024, they held securities worth ₹606 crore in stock portfolios.
- According to ED, Tibrewal was involved in manipulating the stock market in collusion with promoters of listed companies.
- Using his immense capital, Tibrewal created temporary fluctuations in share prices, driving them upwards, and then withdrew funds once prices reached a desirable level.
Two Arrested for Roles in Scam
The ED also arrested Girish Talreja and Suraj Chokhani for their roles in the Mahadev betting app scam case.
- Per ED, Chokhani revealed that the majority of sources for these investments were collected bank entries against cash. The proceeds were then used for investment in the share market.
- As per an Economic Times report, Chokhani diverted funds worth ₹432 crores through a betting website ‘Sky Exchange’ into the stock market shortly after his arrest.
- ED suspects most of those funds were diverted into small and mid-cap stocks.
Politicians, Bureaucrats Suspected to be Involved
Earlier, ED said the alleged illegal funds generated by the Mahadev app were used to pay bribes to politicians and bureaucrats in Chhattisgarh, where the main promoters and operatives of the app are from.
So far, ED has seized/frozen movable properties worth ₹1764.5 crore. 11 accused have been apprehended in the case.
What is the Mahadev Betting App Scam?
The Mahadev online gaming and betting app scam involves allegations of money laundering, foreign exchange violations, and bribery of politicians and bureaucrats.
Key aspects:
- Mahadev was an online betting and gaming app that claimed to offer users the chance to place bets on cricket, kabaddi, tennis, football matches, etc.
- The app was being operated by a company called ‘Betya Technolabs Private Limited’ incorporated in Raipur, Chhattisgarh in 2020.
- ED began a probe in February 2021 on suspected FEMA violations. Found that the app collected ₹300 crore funds from users, but didn’t show corresponding withdrawals indicating siphoning.
- Further investigations revealed a multi-layered structure of shell companies with fake directors that were used to launder money via cryptocurrencies, foreign entities, etc.
- Politicians, bureaucrats, law enforcement officials, etc. were bribed to protect the operations.
The Enforcement Directorate will continue investigations to unravel the full extent of the scam and bring all accused to justice. The freezing of shares worth ₹1100 crore linked to prime accused Tibrewal is the latest action in the ongoing probe.