Mahadev Scam Accused Ability Games Had Share Purchase Pact with Delta Corp: Report
Moneylife Digital Team 07 May 2024
The enforcement directorate (ED)’s investigation into the multi-crore Mahadev illegal betting application scam has revealed that one of the accused firms, Ability Games Ltd, entered into a share purchase agreement with Delta Corp Ltd— a listed company engaged in the casino gaming industry in India, to sell its Nepal-based casino business, says a report. Last month, the ED filed a fresh charge-sheet, naming 25 entities in the multi-crore Mahadev betting app-linked money laundering case.
 
Quoting from court documents, a report from Economic Times (ET) says, in his statement to the ED, Manoj Jain, chief executive officer (CEO) of Delta Corp —which is part of the third chargesheet, has elaborated on the deal with Ability Games. "Delta Corp wanted to sell 100% of its casino business in Nepal, which was invested through its wholly-owned subsidiary, Caravella Entertainment Pvt Ltd (CEPL). Suraj Chokhani's Ability Games was supposed to buy 65% shares of Caravella Entertainment, while the balance 35% was to be bought by Ashtek Consultancy, promoted by Ajit Mittal. That, it was agreed that Rs10 crore will be paid in cash over and above Rs80 crore, which was the enterprise value of Caravella Entertainment."
 
In a regulatory filing in February this year, Delta Corp announced the divestment of its holding in Caravella Entertainment which held an 89.286% stake in Deltin Nepal Pvt Ltd. "The divestment represents an enterprise value of Rs80 crore comprising of Rs18 crore of parent debt and Rs62 crore of equity value on a nominal investment of Rs1 lakh equity," the company says.
 
Earlier in 2023, Delta Corp and its two subsidiary companies received show-cause notices from the directorate general of GST intelligence (DGGI), Hyderabad, for alleged short payment of goods and services tax (GST) aggregating to Rs16,822.9 crore for the period 1 July 2017 to 31 March 2022.
 
Ability Games, owned by accused Suraj Chokhani, was one of the 16 entities used by Mahadev in layering and concealing crime proceeds generated through illegal betting operations, the report says.
 
"The probe by ED has pegged the proceeds of crime generated through illegal betting operations of Skyexchange, an entity linked to the Mahadev Online Book scam, between September 2020 and February 2024 at about Rs3,916 crore. Additionally, the other linked entity, Lotus365.com, was making around Rs50 crore per month in cash. The agency has pegged the tentative proceeds of crime Rs2,400 crore for 48 months," ET says.
 
In a release in March this year, the ED says the Dubai-based hawala operator Hari Shankar Tibrewala (sometimes mentioned as Tibrewal) used Suraj Chokhani (who owns Ability Games) to launder and hide proceeds of crime under the guise of share investment for Indian companies. 
 
The ED says, "Majority of source for these investments has been collected by way of receiving bank entries against cash in these companies and utilising the proceeds for investment in share market. As of 29 February 2024, the Indian companies under the control of associates of Mr Tibrewala held around securities worth Rs580 crore in stock portfolios. Foreign entities also invested in India via FPI route and as of 29 February 2024 they were found to be holding securities worth Rs606 crore in stock portfolios." 
 
"The searches in Kolkata also revealed that Mr Tibrewala was also involved in the manipulation of the stock market in collusion with the promoters of the listed companies. Mr Tibrewala, using his immense capital, used to create temporary fluctuations in share prices, driving them upwards, and then withdraw funds once the prices reached a desirable level," it added.
 
Mahadev Online Book is an umbrella syndicate arranging online platforms to enable illegal betting websites to enrol new users, create user IDs, and launder money through a layered web of benami bank accounts. 
 
The ED investigation revealed that the operations of Mahadev Online Book are being run from Dubai and it operates by franchising 'panel/ branches' to their known associates on a 70%-30% profit ratio. Mahadev Online Book's main promoters are also partners or promoters in multiple online betting books like 'Reddy Anna' and 'Fairplay'. Large-scale hawala operations are done to siphon off the proceeds of betting to off-shore accounts, the ED says.
 
Earlier in this case, movable properties worth Rs572.41 crore were seized or frozen by the ED during searches conducted under the Prevention of Money Laundering Act (PMLA). It also issued two provisional attachment orders, attaching movable and immovable properties valued at Rs142.86 crore. The ED has apprehended nine accused in this case and, so far, the total attachment and freezing in the case is Rs1,296.05 crore, the agency says. (Read: Crash in Shares Linked to Dubai-based Hawala Operator Hari Shankar Tibrewala)
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