New Delhi, Nov 4 (UNI) The Enforcement Directorate (ED) announced on Tuesday that it recently conducted search operations at multiple locations in Mumbai. The raids are part of an ongoing investigation into Varanium Cloud Ltd., its promoter Harshavardhan Sabale, and other associated entities.
The searches were launched based on credible information indicating large-scale manipulation of financial records, circular fund movements, and suspected money laundering.
According to the ED, Varanium Cloud Ltd. and its associated companies raised approximately Rs 40 crore through an Initial Public Offering (IPO) in September 2022. The company claimed the funds would be used to set up edge data centers and digital learning centers in smaller towns. Projecting itself as a fast-growing firm in digital media, blockchain, and EdTech, it invoked the names of prominent business groups and media outlets to gain public trust.
However, the promised projects were never executed. Instead, the investigation suggests the funds were diverted through false transactions and circular movements to artificially inflate the company’s turnover and market value. Subsequent trading patterns showed an artificial price escalation followed by a heavy sell-off of shares. The ED alleges this is consistent with a “pump and dump” scheme, where a stock’s price is deliberately inflated through misleading claims and then sold at a high price, duping the public and causing losses to genuine investors.
A preliminary analysis of seized material reveals a vast network of mule bank accounts operated from Mumbai. These accounts were opened using forged KYC documents and dummy SIM cards. During the search, the ED recovered over 400 cheque books linked to such mule accounts, more than 200 SIM cards contained in over 100 dual-SIM mobile phones, and other electronic devices like laptops and hard drives containing incriminating evidence.
The findings point to a well-coordinated racket operating “drawer companies” from a few small rooms, using fake identities, mule bank accounts, and proxy communication channels to dupe the public and launder money.
The ED has identified several other connected persons and entities that are now under scrutiny.
