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Mahadev App Scam: Accused Firm Had Ties With Delta Corp 

The Enforcement Directorate’s (ED) investigation into the Mahadev illegal betting app scam has discovered a significant detail. According to court documents reviewed by ET, one of the accused firms, Ability Games Ltd., was reportedly engaged in a share purchase agreement with Delta Corp for the sale of the latter’s Nepal-based casino business.

Delta Corp Ltd #Restructuring: Co entered into a share purchase agreement with Ability Games Ltd and Ashtek Consultancy Pvt Ltd (Purchasers) for sale of Co’s entire shareholding in Caravella Entertainment Pvt Ltd, a WOS of Co which owns 89.29% stake in Deltin Nepal Pvt Ltd.… pic.twitter.com/Ol271fVzdE

— AoI Ventures (@aoiventures) February 20, 2024

As per news reports, Delta Corp in 2023 and its two subsidiaries received show cause notices from the Directorate General of GST Intelligence (DGGI), Hyderabad, for an alleged short payment of Goods and Services Tax (GST). This amount reportedly totaled up to ₹16,822.9 Crore for a period spanning from 1st July 2017 to 31st March 2022.

Mahadev Book Latest News: From Arrests To Actors Summons, Get All Information Here!

 

Ability Games Ltd., owned by accused Suraj Chokhani, was among the 16 entities which Mahadev app allegedly used in layering and concealing proceeds generated through illegal betting operations.

The ED’s investigation has estimated the proceeds of crime from illegal betting operations conducted by Skyexchange, a Mahadev-linked entity, between September 2020 and February 2024, to be around ₹3,916 Crore. 

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Additionally, another linked entity, Lotus365.com, was reportedly generating approximately ₹50 Crore per month in cash. The agency has tentatively estimated the proceeds of crime to be around ₹2,400 Crore for a 48-month period.

In his statement to the ED, Manoj Jain, CEO of Delta Corp Ltd., part of the third chargesheet, detailed the deal with Ability Games. Delta Corp intended to sell 100% of its Nepal casino business, which was held through its wholly-owned subsidiary, Caravella Entertainment. 

DELTA CORP: CO HAS ENTERED INTO A SHARE PURCHASE AGREEMENT WITH ABILITY GAMES FOR SALE OF THE CO’S ENTIRE SHAREHOLDING IN CARAVELLA ENTERTAINMENT PRIVATE WITH CASH CONSIDERATION OF 62CR RUPEES

— RedboxGlobal India (@REDBOXINDIA) February 20, 2024

Ability Games was slated to purchase 65% shares of Caravella Entertainment, while the remaining 35% were to be acquired by Ashtek Consultancy, promoted by Ajit Mittal. It was agreed that ₹10 Crore would be paid in cash, in addition to the ₹80 Crore enterprise value of Caravella Entertainment, as per the statement reviewed by ET.

Earlier this year, the ED had frozen shares worth ₹1,100 crore held in demat accounts linked to the accused in the case. The agency suspects that most of these stocks were small and mid-cap stocks.

The ED’s revelations come at a time when Sebi chief Madhabi Puri Buch has expressed concerns over the stretched valuations of small- and mid-cap stocks, which are typically favored by retail investors and have continued to attract their attention through monthly purchase mandates to mutual funds focused on such investment themes.

The third supplementary charge sheet has been filed against 23 individuals, including 14 entities suspected to be conduits used to invest in the share market.

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