Mahadev Scandal Exposed: How Illegal Gambling Profits Hijacked the Stock Market!

In a shocking revelation, the Enforcement Directorate (ED) uncovered a scandal involving the manipulation of stock prices in the Indian stock market by a partner of a Dubai-based firm operating the Mahadev betting app. The ED has frozen shares worth Rs 1,100 crore in demat accounts linked to the firm. This scandal sheds light on the murky world where illegal gambling profits are funneled into the stock market, leading to massive disruptions and losses for small investors.

The Manipulative Scheme

Hari Shankar Tibrewal, hailing from Kolkata, stands accused of using the proceeds from his illegal gambling and betting business to manipulate stock prices. He would artificially inflate share prices, creating temporary fluctuations, and then withdraw funds once the prices reached a desirable level. This modus operandi allowed Tibrewal to make significant profits, while causing losses to unsuspecting investors.

The ED’s Investigation

The ED’s investigation revealed that Tibrewal had plowed money into the stock market through five foreign entities. The agency is now in the process of recording statements from promoters of listed companies who used Tibrewal’s assistance to manipulate stock prices. Additionally, two associates of the Mahadev group, who were handling the group’s operations in India, have been arrested in connection with the case.

Collusion with Stockbrokers and Promoters

Tibrewal’s scheme involved collusion with stockbrokers and other intermediaries, as well as promoters of listed companies. These individuals used Tibrewal’s funds to manipulate share prices, resulting in significant profits for themselves but causing losses to small investors. The Indian companies under Tibrewal’s control held securities worth Rs 580 crore, while the foreign entities held securities worth Rs 606 crore.

The Mahadev Group’s Controversial Beginnings

The Mahadev Group, founded by Saurabh Chandrakar and Ravi Uppal along with their partners, first came under scrutiny after Chandrakar spent over Rs 200 crore on his wedding in Dubai, inviting several celebrities to perform. This lavish spending raised eyebrows and led to further investigation into the group’s activities.

Stocks Affected by the Scandal

Several companies, including Balu Forge, Gensol Engineering, Pritika Auto, and Servotech Power, are in the holdings of Zenith Multi Trading Dmcc. Sigachi Industries Ltd is in the holdings of Caterfield Global Dmcc, while Collector Gadgets, HMA Agro Industries, Manoj Vaibhav Gems, OK Play India, and Tiger Logistics are in the holdings of Tano Investment Opportunities Fund. These stocks have been heavily impacted by the scandal, with many of them trading at lower circuits and facing significant downturns.

Source: tradingview

Conclusion 

The stock market manipulation scandal involving Hari Shankar Tibrewal and the Mahadev group highlights the need for greater transparency and accountability in the financial markets. It serves as a cautionary tale for investors to be vigilant and conduct thorough due diligence before investing in any company.

The ED’s crackdown on such illegal activities sends a strong message that market manipulation will not be tolerated and perpetrators will be brought to justice.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.