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MUMBAI: The Enforcement Directorate (ED) conducted searches at 19 locations across Mumbai, Delhi and Gurgaon as part of its investigation into a Rs 137-crore money-laundering case against Suumaya Industries Ltd, Dentsu Communications India Pvt Ltd, stockbrokers and their associates for alleged share price manipulation.
The searches yielded Indian and foreign currency worth Rs 50 lakh and gold bars valued at Rs 3.4 crore, along with crucial documents related to property dealings and digital devices.
On Thursday, the ED released a press release stating that Suumaya group’s listed entities engaged in transactions totalling Rs 5,000 crore, with merely 10% being legitimate.
The circular transaction pattern artificially inflated turnovers of involved entities, including Dentsu Communications India, misleading investors through falsely elevated share prices.
The ED found that company promoters collaborated with stockbrokers and merchant bankers, making cash payments for NCDEX commodities contracts (agricultural commodity exchange) and acquiring companies later listed on the stock exchange. The release said, “Turnover of Suumaya Industries Ltd increased from Rs 210 crore to Rs 6,700 crore in a span of two years from 2020-2022 which affected the share price to increase astronomically from Rs 19 per share to Rs 736 during this period.”
Attempts by TOI to reach both companies through the telephone numbers mentioned on their websites went unanswered.
The ED case is based on an FIR registered by Worli police against Dentsu Communications India, Suumaya Industries and their promoters for allegedly conspiring to misappropriate Rs 137 crore under the pretext of ‘Need to Feed programme’ benefits. A non-banking financial company was the complainant.
The ED claimed that the fraud was perpetrated under the guise of securing govt contracts during the Covid pandemic, utilising startups for circular trading to artificially enhance valuations for bank financing.
According to the ED, Summaya Industries falsely claimed to have secured a contract from Haryana govt for the ‘Need to Feed’ programme to supply agro products to the needy. The ED said that “no such contract or programme ever existed. The accused entities never supplied any agro product materials”. The agency added that the accused created fraudulent documentation, including fake lorry receipts and invoices, to demonstrate Rs 5,000 crore worth of transactions by Suumaya group’s listed entities, of which only 10% were genuine. These circular transactions increased turnover figures, including those of Dentsu Communications India.
The ED further said that the circular transactions led to an increase in the turnover of the entities helping them to bid on govt contracts, and for startups to improve their valuation on books for loans.
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