ED officials conduct raids in Mumbai, Delhi and Gurgaon in connection with ₹137 crore financial fraud | Representative image



Mumbai: The Enforcement Directorate (ED) on December 10 conducted searches at 19 locations in Mumbai, Delhi and Gurgaon as part of its probe into a massive alleged financial fraud of Rs 137 crore involving Suumaya Industries Ltd and Dentsu Communications India Pvt Ltd.


The agency said on Thursday that the raids were conducted under the Prevention of Money Laundering Act (PMLA), 2002 and resulted in the seizure of Rs 46 lakh in cash, foreign currency worth Rs 4 lakh and gold bars worth Rs 3.4 crore. .


Officers also seized documents related to property transactions and digital devices during the searches, which are part of an ongoing investigation into alleged money laundering and financial embezzlement.


The investigation stems from an FIR filed by Worli police alleging that M/s Dentsu Communications India Pvt Ltd, M/s Suumaya Industries Ltd and its promoters siphoned off Rs 137 crore. The funds were allegedly embezzled in the guise of promoting a fictitious ‘Need to Feed’ scheme, allegedly linked to the Haryana government.


According to the ED investigation, trade finance was fraudulently obtained from NBFCs on the pretext of supplying agri-products for the Haryana government’s ‘Need to Feed’ scheme to supply agri-products. The accused has not received any government contract, and no such program has ever existed.


Furthermore, the accused entities have never supplied agricultural products for such an initiative. To create the false impression that he was supplying agricultural products, the suspect allegedly conspired to falsify documents, including forged truck receipts and invoices.


According to an ED statement, the searches revealed that the Suumaya Group’s listed entities entered into transactions worth Rs 5,000 crore, with only 10 percent of these transactions being legitimate. These transactions followed a circular pattern, artificially inflating the revenues of the entities involved, including Dentsu India.


Investors were misled by these inflated trades, which led to a dramatic increase in stock prices. Over a period of two years, from FY 2019-20 to FY 2021-22, Suumaya Industries Ltd’s turnover rose from Rs 210 crore to Rs 6,700 crore, causing its share price to skyrocket from Rs 19 to Rs 736.


Further research found that these circular transactions also contributed to increased revenue for entities bidding for government contracts and startups seeking higher valuations. The transactions are said to have been carried out in collaboration with stockbrokers and investment bankers, involving cash payments for commodity contracts on NCDEX and the acquisition of companies, which were later listed on the stock exchange.






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