The Securities and Exchange Board of India (SEBI), the income-tax department, and the special investigative team (SIT) on black money are learned to be spearheading a multi-agency probe into an alleged flow of unaccounted money through 100 listed companies. One of the companies involved was Mahan Industries in Black Money Scam.
SEBI examined the role of these companies. It misused the exchange platform to launder money. In the near term, the regulator might pass an order against 25 of those. Considering the number of companies involved, regulatory estimates peg the quantum of the alleged scam at close to Rs 20,000 crore.Black money or money laundering scam increased day by day. Mahan Industries is regarded as the penny stock.
Analysis of Mahan Industries Case
Since, the companies include Pearl Agriculture, Pearl Electronics, Greencrest Financial Services, Global Infrastructure and Finance, Mishka Finance and Trading, Dhanleela Investment, Mahan Industries, Prabhav Industries, and Avance Technologies. Most of these stocks are penny counters. Queries sent to the companies elicited no response.
Revenue Secretary Shaktikanta Das, while talking about black money stashed abroad by Indians, had recently referred to unaccounted money present in the domestic market. “The quantum of domestic black money is equal to the money stashed abroad,” Das had said.
The SIT on black money has already taken the case on record. “We had received a reference from the income-tax department that the promoters of certain low-value listed companies are using the stock exchange platform to get an advantage of long-term capital gains (LTCG) and evade taxes.
The same case of Radford Global and First Financial Services believed the same modus operandi. Hence, in an order passed last week, Sebi’s whole-time member Rajeev Kumar Agarwal had barred 260 market entities, including two companies, their promoters, brokers, and a clutch of investors, from accessing the securities markets.
Though, the regulator accused the entities to misuse the stock exchange. It generated long term capital gains of Rs.485 crore. Therefore, it converted unaccounted cash into legitimate money.
SEBI investigated that 100 companies exist only on papers. It converted black money to white money.The regulatory probe is determining the role of traders and operators. Hence, it acted in concert with promoters to artificially rig volumes and prices.
Additionally, the regulator focused to determine the funds infused the companies by a way of preferential allotment. It utilized the purposes rather than disclosed. The money purchased for shares.
The probe verified that the companies and related entities trade amongst themselves.It manipulated the share price. Before and after the preferential allotment.
Final Words regarding Mahan Industries Case
In its order dated December 20, SEBI had noted that the promoters of two companies had malafide intent. “The modus operandi of allotting shares on a preferential basis at a premium, pumping the share price artificially and then dumping the price so that the same cycle could be repeated, demonstrates the malafide intent of the Radford Group & suspected entities. Therefore, authorities deceived by laundering black money. Raked in tax-free profits,” said Agarwal.
