ED Seizes Rs 35 Crore Assets in Major Financial Fraud Investigation
The Enforcement Directorate has taken decisive action against a massive financial fraud scheme. The agency's Mumbai zonal office has provisionally attached properties worth Rs 35.22 crore belonging to the Suumaya group and its associates.
Properties Seized Under Money Laundering Act
These attached assets include both movable and immovable properties. The movable properties consist of bank balances, Demat holdings, and mutual funds. The ED executed this attachment under the Prevention of Money Laundering Act of 2002.
This development follows the arrest of Ushik Gala, promoter of the Suumaya group, on November 17. The arrest came nearly two months before this latest enforcement action.
How the Fraud Operated
According to the investigation, the Suumaya group allegedly misled investors through a scheme called the 'Need to Feed Programme'. The company promised benefits to those who invested in this program.
The accused created a completely bogus contract. They falsely claimed this contract came from the Haryana government under the same 'Need to Feed' program. This fabricated contract helped them obtain funds and trade financing.
Investigators discovered that Suumaya group entities received funds from investors. Ushik Gala then diverted these funds to dummy agro trader entities based in Delhi and Haryana. An agent facilitated these transfers to create an appearance of genuine procurement.
Circular Transactions Inflated Turnover
No actual agricultural purchases ever occurred. Instead, the diverted funds traveled back to Ushik Gala through a combination of cash transactions and RTGS entries from other shell entities.
The Suumaya group created fake invoices and lorry receipts to simulate large trade volumes. These documents supported circular transactions totaling approximately Rs 5,000 crore. Only about ten percent of these transactions represented genuine business activity.
This circular pattern of transactions artificially boosted the company's financial metrics. The turnover of involved entities increased dramatically as a result of these manipulations.
Massive Turnover Inflation Revealed
The investigation uncovered staggering financial manipulation. Suumaya's turnover allegedly jumped from Rs 210 crore to Rs 6,700 crore within just two years.
This artificial inflation caused the company's share price to soar to astronomical levels. Investors in the listed group entities received a completely misleading picture of the company's financial health.
Earlier Search Operations Yielded Evidence
Earlier in the investigation, the ED conducted extensive search operations. Teams searched 19 different locations across Mumbai, Delhi, and Gurgaon.
During these searches, authorities seized movable assets worth Rs 3.9 crore. They also collected a large volume of financial records and digital evidence. These documents provided proof of money laundering activities and fund diversion.
Original Complaint and Charges
The ED initiated its investigation based on an FIR registered by Worli Police Station. This complaint named multiple persons and entities including Suumaya Industries Ltd and its promoters.
The accused face charges under various provisions of the Indian Penal Code of 1860. They allegedly conspired together to embezzle approximately Rs 137 crore from investors.
All these actions occurred under the guise of promising future advantages through the 'Need to Feed Programme'. The investigation continues as authorities work to uncover the full extent of this financial fraud.
