(News Trust of India) : Punishment is being given to low-priced stocks (those trading under ₹10 a share) and small-cap stocks. Amidst the confusion, one person stands out as a possible cause of this trouble—Hari Shankar Tibrewala.
But who is this mysterious person, you might wonder?
Maybe you’re familiar with the Mahadev betting scam?
No?
Let’s explore the details. The story can appear unclear, but we will try to understand it. Okay, let’s begin from the start.
The story takes place in a town in Chhattisgarh during the mid-2010s. Saurabh Chandrakar, a young entrepreneur, ventured into establishing up a juice booth titled Mahadev Juice Centre. Chandrakar had difficulties because of past company failures and significant losses from a gambling problem, but still hoped for success.
Enter Ravi Uppal, a fellow gambler and businessman, who crossed paths with Chandrakar. Together, they concluded that constantly losing money to gambling was unsustainable. Thus, they devised the notion of becoming the ‘house’ and established a betting website.
In 2017, their creation, the Mahadev Book gambling app, made its debut, enabling live bets on athletic events including cricket and football.
Lacking expertise in scaling, they sought advice from the makers of the successful Reddy Anna betting app. Allegedly, this technical support transformed their fortunes.
By 2019, Uppal and Chandrakar relocated to Dubai, joined by their families. They went on an intensive advertising campaign, recruiting millions of people and amassing millions of rupees everyday. Over 10,000 bank accounts worldwide were put up to accommodate the influx of monies.
However, Chandrakar’s excessive display of wealth, highlighted by a lavish ₹200 crore wedding in 2023, caught the notice of India’s Enforcement Directorate.
Investigations showed the illegitimacy of the app and its income. Collaborating with UAE officials, Chandrakar and Uppal were captured.
This simply highlights the alleged swindle, valued at a staggering ₹6,000 crores!
But where does Hari Shankar Tibrewala fit into this complicated web?
Tibrewala, a Dubai-based ‘businessman,’ supposedly partnered with Chandrakar and Uppal, creating a variation of the Mahadev Book app titled ‘Skyexchange.’
His basic operandi was straightforward: acquire monies from customers and channel them through a hidden network of money operators into various bank accounts, owned by Indian or international entities.
The monies, according to the Enforcement Directorate, found their way into the Indian stock markets, reaching ₹1,100 crores. The bulk was invested in smaller companies including Tiger Logistics, Toyam Sports, and Gogia Capital Services, accused of being exploited by Tibrewala’s network.
The choice of smaller corporations facilitated price manipulation, adopting strategies like pump-and-dump to fool retail investors.
In response to these fraudulent practices, the Enforcement Directorate intervened, freezing shares worth ₹1,100 crores in demat accounts affiliated with Tibrewala.
However, not all 30 stocks related to Tibrewala are necessarily manipulated. Public clarifications from several corporations dissociate themselves from Tibrewala. Yet, investor apprehensions continue regarding potential manipulation.
For instance, Gensol Engineering, a solar utility company, had a spectacular surge in its stock value after Zenith Multi Trading DMCC, one of Tibrewala’s enterprises, purchased a stake. Despite allegations of non-involvement by Gensol, doubts continue over Tibrewala’s influence.
Stocks linked with Tibrewala have witnessed huge drops, prompting charges directed against Tibrewala for the recent market collapse.
