MUMBAI: The Enforcement Directorate (ED) recently carried out searches at several locations in Mumbai as part of its money-laundering probe related to a technology firm, Varanium Cloud Limited, its promoter, and associated entities, based on credible information indicating that they were allegedly involved in large-scale manipulation of financial records, circular fund movements and suspected laundering of proceeds of crime.
The accused entities had raised around ₹40 crore through an Initial Public Offer (IPO) in September 2022. An IPO is a privately held firm’s first sale of stock to the public via any stock exchange. The company had allegedly projected itself as a fast-growing technology firm in the fields of digital media, blockchain, EdTech (education technology), and invoked the names of prominent business groups and media outlets to promote the IPO, thereby gaining public trust, the officials said. A blockchain is a decentralised digital ledger that records transactions across a network of computers. They had claimed to set up data centres and digital learning centres in smaller towns, but the promised projects were allegedly never executed, ED officials said on Tuesday. The funds raised were allegedly diverted through false transactions and circular movements to inflate turnover and market value.
“Subsequent trading patterns showed artificial price escalation followed by heavy offloading of shares, consistent with a pump-and-dump scheme, wherein the stocks of the company were deliberately inflated through misleading claims and later dumped at high prices, duping the public and causing losses to genuine investors,” an ED official said.
During its searches conducted last Wednesday, the ED teams recovered over 400 cheque books linked to mule bank accounts and over 200 SIM cards, contained in more than 100 dual-SIM mobile phones that had been mostly issued under names of persons purportedly from Mumbai. ED’s preliminary analysis of the seized material revealed a vast network of mule bank accounts allegedly opened using forged Know-Your-Customer (KYC) documents and dummy SIM cards, which was being operated from Mumbai, ED officials said.
These mule accounts were allegedly used for spreading and routing funds through over 150 shell (dummy) companies, concealing the origin of the illicit money, the officials said. Among the recovered items were also electronic devices such as laptops and hard drives, among others, containing incriminating evidence.
“The findings expose a well-coordinated racket, operating drawer companies from small rooms to create fake identities, multiple mule bank accounts, and proxy communication channels to dupe the public and launder their hard-earned money,” the ED official said. The agency has identified several other connected persons and entities in the case whose suspected roles are being scrutinised.
