ED conducts searches in multiple cities as part of ongoing probe into Summaya-Dentsu case

New Delhi: As part of a continuing investigation into the Summaya-Dentsu case, the Directorate of Enforcement (ED) carried out search operations at 19 sites in Mumbai, Delhi, and Gurgaon, the agency said. The agency claims that the searches were carried out on December 10 in accordance with the PMLA (Prevention of Money Laundering Act).

During the search, the ED discovered gold bars worth Rs 3.4 crore, foreign money worth Rs 4 lakh, and confiscated Indian currency worth Rs 46 lakh.

“Other incriminating documents related to immovable property transactions and digital devices have been found and seized during the search proceedings,” according to an ED statement.

An FIR was filed by Worli Police Station against Dentsu Communications India Private Limited, Suumaya Industries Ltd, and its founders, among others, and served as the foundation for the agency’s inquiry.

“They are accused of conspiring together and embezzling the funds to the tune of Rs. 137 crore under the guise of promising future ‘Need to Feed program’ advantages,” according to the agency.

According to the findings of the investigations conducted so far, “Trade finance was obtained from NBFCs to sell agricultural goods under the guise of the Government of Haryana’s ‘Need to Feed’ initiative. The government has not awarded any contracts to the accused, and there was never a program like that.

Despite not providing any agro-product ingredients for any such program, the accused, according to the authorities, produced “fake records including fake lorry receipts and invoices.”

“In order to create a fake impression that it is supplying agro products, the accused persons in this case connived and created fake records, including fake lorry receipts and fake invoices,” said the statement.

According to the ED, during the search operations, it was discovered that merely 10% of the transactions made by the Suumaya group’s listed firms totaled Rs 5000 crore.

“The cyclical nature of these deals increased the turnover of all parties involved, including Dentsu India. Share prices skyrocketed as a result of investors in the Suumaya group’s listed group companies being misled to display such inflated transactions. Over the course of two years, from FY 2019–20 to FY 2021–22, Suumaya Industries Ltd.’s turnover grew from Rs. 210 Crore to Rs. 6700 Crore,” the statement said.

As a result, the share price increased from Rs 19 per scrip to Rs 736.

“The circular transactions also led to an exponential increase in turnover of entities bidding for government contracts, startups for valuation purposes, and others,” the agency said in its statement.

According to investigations, this was carried out in collusion with merchant bankers and stock brokers, whereby cash payments were made for commodities contracts on the NCDEX and the purchase of businesses that were then listed on a stock market.