Wednesday was not a good day for the domestic stock market. Yesterday’s trading saw a sell-off scene everywhere in the market. Especially in the small cap and mid cap segment, the situation was very bad. In a way, it is almost like ending a wonderful rally that has been going on for a year. Now a shocking report has come out about it.
The rally came from the money of this scam.
An ET report revealed that about Rs 5,000 crore was also invested in shares of the Mahadev app scam. The scam money was mainly invested in small cap stocks. The report fears that the proceeds from the Mahadev app scam could also be responsible for the incredible rally in small-cap and mid-cap shares in the past one year.
Shares worth thousands of crores seized
This is also reflected in the actions of law enforcement agencies. The Mahadev app scam case is currently being investigated by the ED. The ED has seized shares worth thousands of crores of rupees a few days ago in connection with the investigation. These shares are worth over Rs 1,100 crore and are held in a demat account linked to a Hawala operator based in Dubai. The name of the hawala operator involved in the Mahadev app scam has emerged. He has been identified as Harishankar Taborwal of Kolkata.
The hawala operator established his abode.
The ED believes Taborwal invested the Mahadev app scam money in the Indian stock market through a Dubai-based company. The scam money was invested in the market through foreign portfolio investment. According to the ED, Taborwal was a partner of the app’s promoters, Mahadev, in running an illegal betting app called SkyExchange. Taborwal, who worked as a hawala operator, was also involved in investing the scam money in shares. The ET report said – ED believes that most of the money from this scam was invested in small-cap and mid-cap shares.
Thus the stock market crashed.
Small-cap and mid-cap stocks have been witnessing a surprising rally for some time. On the basis of this rally, the mid-cap and small-cap indices of the stock market beat the major indices by a large margin. Many market analysts were surprised by this. Even Madhabi Puri Boch, chairperson of market regulator SEBI, himself spoke of a bubble in these shares and expressed fear of manipulation. After that, the small cap index fell more than 5 percent in the market yesterday. While the mid-cap index fell by 4 percent and the SME index by 6 percent.
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