Anatomy of a smallcap stock scam

livemint.com:

BENGALURU , MUMBAI : The already overheated smallcap market may be in for more turmoil with apparent links to the Mahadev betting scam surfacing. The Enforcement Directorate recently seized the assets of several entities that it believes were used as vehicles to launder illicit money made from the illegal Mahadev Online betting app. Turns out that 13 smallcap companies valued at between ₹63 crore and ₹3,300 crore have more than 1% shares owned by at least four of these entities, according to a review of share ownership by Mint.

One of these is the Dubai-headquartered Zenith Multi Trading DMCC, of which Hari Shankar Tibrewal, the kingpin of the Mahadev betting scandal, is a beneficial owner. The Dubai-based Tibrewal helped the promoters of Mahadev Online, Sourabh Chandrakar and Ravi Uppal, launder proceeds earned from the betting app into the Indian stock market, and holds stock worth ₹580 crore, the Enforcement Directorate said in a statement on 8 March. Zenith Multi Trading has bought over 1% shares in five smallcap Indian companies—Gensol Engineering Ltd, Balu Forge Industries Ltd, Pritika Auto Industries, Paramount Communications, and Servotech Power Systems, show shareholdings in these companies reviewed by Mint.

Another fund in the ED’s crosshairs is the Kolkata-based Dream Achiever Consultancy Services Pvt. Ltd, owned by Tibrewala’s Indian aide Suraj Chokhani. Dream Achiever has bought shares in BLB Ltd, LKP Finance Ltd, and Gogia Capital Services, according to a review of share ownership of the listed entities.