ED raid in Mumbai: Fraud in the name of unlisted stocks of NSE, searching at 8 places simultaneously, know the whole story?

The Enforcement Directorate (ED) has raided several places in Mumbai and Chennai in connection with alleged fraud with investors in the name of unlisted shares. The agency said that this action was taken as part of money laundering investigation. It is alleged that investors were being defrauded by selling so-called “unlisted” shares of NSE India Limited. According to ED, on February 27, the agency’s Headquarters Investigation Unit searched a total of eight places in Mumbai and Chennai under the Prevention of Money Laundering Act (PMLA).

targeted companies

Many companies and their directors were targeted in this action. These include entities like Atom Capital Private Limited, Optimus Financial Solutions Private Limited, Babli Investment Private Limited and Supremus Angel.

The people whose names are in the investigation include Satish Kumar, Sanjay Damani, Neeraj Nisar, Krish Vohra, Manish Soni and Nisha Kumari. The agency alleges that these people were part of a group that defrauded investors and raised money by promising them unlisted NSE shares.

It is being said how the fraud was done

According to the ED, the accused told investors that they held shares of NSE India Limited and they could transfer these shares at a premium through a private share purchase agreement.

However, investigation revealed that the accused did not actually own the shares being offered for sale. Since NSE India shares are not currently listed on any stock exchange, they are not traded on platforms like NSE or BSE, nor are they covered under the exchange settlement system. ED says that the accused took advantage of this system and received huge amount as advance payment from investors.

Money was circulated through multiple accounts

The investigation also revealed that the money collected from investors was sent through several bank accounts and later allegedly invested in movable and immovable properties. During the raid, officials seized property documents, digital records and other vital evidence, which the agency said was incriminating material.

ED has frozen several bank and demat accounts linked to Satish Kumar, Sanjay Damani and the companies under investigation under Section 17(1A) of the Prevention of Money Laundering Act. According to the agency, evidence of “proceeds of crime” has been found in these accounts.

Complaints from many states

According to the agency, investors from many states have filed complaints about this alleged scheme. However, in some cases, local police agencies have not yet registered formal FIRs. Investigation is ongoing.

Demand increased due to possible IPO of NSE

This alleged fraud has come to light at a time when the demand for shares of NSE India Limited is increasing in the unlisted market due to its possible IPO. NSE Managing Director and CEO Ashish Chauhan recently said that the exchange has received No-Objection Certificate (NOC) from SEBI for its proposed IPO and is in the process of preparing the application.

He said it could take three to four months to prepare these documents, and the regulatory review is expected to take another two to three months. Therefore, the exchange aims to list by the end of the year. Market experts say that the demand for NSE shares in the unlisted market has increased due to the possible IPO. However, some intermediaries can take advantage of this environment and mislead investors.

In such cases, investors are advised to verify the genuine ownership of the seller through demat records before purchasing shares and transact only through reputable depository systems. The Enforcement Directorate (ED) has said that further investigation is underway and more revelations may be made in the future.