ED action against money laundering syndicate triggers small-cap and penny stock sell-off


Gaurav Tyagi

29 reads

Gaurav Tyagi

29 reads

The arrests of two individuals related to Hari Shankar Tibrewala’s network of companies have seemingly exposed a money laundering operation which funnelled money into several listed Indian companies.

March 15, 2024


It has been a challenging week for listed Indian companies, with small-cap and mid-cap indices dropping by nearly 4% and 6% after Madhabi Puri Buch, the chief of markets regulator Securities and Exchange Board of India (SEBI), expressed concerns about unrealistic valuations and hinted at a bubble forming in the segment. 

However, a slew of small-cap and penny stock companies saw their share prices hit the lower circuits for an entirely different reason after the Enforcement Directorate (ED) announced the arrests of two individuals related to prolific investor Hari Shankar Tibrewala’s network of companies and the subsequent attachment of assets worth Rs 1,765 crore. 

On Wednesday, the law enforcement agency revealed that Girish Talreja and Suraj Chokhani had been arrested under provisions of the Prevention of Money Laundering Act (PMLA), 2002. They were apprehended for their involvement in money laundering activities linked to the Mahadev online betting racket and were allegedly working as agents of Tibrewala in India. 

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