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New Delhi, Nov 4 (IANS) The ED conducted searches at multiple locations in Mumbai as part of its investigation against a company that duped investors by falsely promising to set up data and digital learning centers in small towns. An official gave this information on Tuesday.
The Enforcement Directorate (ED), Headquarters Investigation Unit, New Delhi on October 29 conducted a search operation against Veranium Cloud Limited, its promoter Harshvardhan Sable and other associated entities.
It was alleged that Veranium Cloud raised around Rs 40 crore through a September 2022 IPO, claiming that it would be used to set up edge data centers and digital learning centers in small cities.
The company presented itself as a fast-growing technology firm in the fields of digital media, blockchain and edtech and even used the names of major business groups and media outlets to promote the IPO, thereby gaining public trust.
The latest search operation was conducted on October 29 at several locations in Mumbai under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The ED statement said the searches were conducted based on credible information indicating large-scale manipulation of financial records, circular fund movement and suspected laundering of proceeds of crime.
However, the promised projects were never executed by Veranium Cloud Ltd, and funds were diverted through false transactions and circular movements to inflate the turnover and market value, the agency said.
The subsequent trading pattern revealed artificial price increases followed by massive selling of shares, consistent with a “pump and dump” scheme, where company shares were deliberately inflated through misleading claims and later sold at higher prices, thereby defrauding the public and causing losses to genuine investors.
Preliminary analysis of the seized material reveals that a vast network of bank accounts opened using forged KYC documents and dummy SIM cards was being operated from Mumbai.
The ED said over 400 check books linked to such original bank accounts and over 200 SIM cards present in over 100 dual SIM mobile phones, mostly issued in the names of Mumbai-based individuals, were recovered during the searches.
These accounts were used to conceal the origin of illicit funds and transfer them through more than 150 shell and dummy companies. Other electronic devices, such as laptops, hard drives containing incriminating evidence have also been recovered from the search proceedings.
The findings expose a well-organized racket operating “drawer companies” from a few small rooms, in which fake identities, multiple bank accounts and proxy communication channels were systematically used to defraud the public and loot their hard-earned money.
The ED has also identified several other linked individuals and entities under the investigation.
–IANS
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