New Delhi, Nov 4 (NationPress) The Enforcement Directorate (ED) executed searches across several sites in Mumbai as part of a probe into a company accused of misleading investors with false promises to establish data and digital learning centres in smaller towns, according to an official report on Tuesday.

The ED's Headquarters Investigation Unit in New Delhi carried out these search operations on October 29 against Varanium Cloud Ltd, its promoter Harshavardhan Sabale, and other related entities.

It was claimed that Varanium Cloud amassed approximately Rs 40 crore through their IPO in September 2022, asserting that the funds would facilitate the establishment of edge data centres and digital learning facilities in smaller towns.

The company portrayed itself as a rapidly growing technology player in the realms of digital media, blockchain, and EdTech, even leveraging the names of renowned business groups and media outlets to boost its IPO, thereby earning public confidence.

The latest search action, conducted on October 29 at various sites in Mumbai, was executed under the Prevention of Money Laundering Act (PMLA), 2002.

The searches were prompted by reliable information suggesting extensive manipulation of financial records, circular fund movements, and suspected laundering of Proceeds of Crime, according to the ED's statement.

However, the anticipated projects were never realized by Varanium Cloud Ltd, and the funds were rerouted through deceitful transactions and circular movements to artificially inflate turnover and market value, as reported by the agency.

Analysis of trading patterns indicated an artificial price surge followed by significant share offloading, characteristic of a “pump and dump” scheme, where the company's stocks were strategically inflated through misleading claims and subsequently sold at elevated prices, misleading the public and causing financial losses to genuine investors.

Initial analysis of the materials seized reveals that a vast network of mule bank accounts, created using forged KYC documents and dummy SIM cards, was managed from Mumbai.

During the search, over 400 cheque books linked to such mule accounts and more than 200 SIM cards found in over 100 dual SIM mobile phones, primarily registered to individuals from Mumbai, were recovered, stated the ED.

These accounts were utilized for layering and routing funds through over 150 shell and dummy companies, obscuring the origin of illicit funds. Other electronic devices, including laptops and hard drives containing incriminating evidence, were also retrieved during the search activities.

The revelations unveil a meticulously orchestrated racket operating “Drawer companies” from modest setups, where fictitious identities, multiple mule bank accounts, and proxy communication channels were systematically employed to defraud the public and launder their hard-earned money.

The ED has also pinpointed several other related individuals and entities currently under investigation.