Mumbai broker arrested for illegal shares trading worth Rs 4,672 crore in 3 months

A 45-year-old share broker in Mumbai who allegedly indulged in illegal trading in shares with transactions worth Rs 4,672 crore in nearly three months has been arrested.

Called ‘Dabba trading’, it is an illegal form of trading in shares where operators let people to deal in equities outside the stock exchange platform. Jatin Sureshbhai Mehta, arrested from Kandivali on Tuesday, allegedly cheated the government of more than Rs 1.95 crore by not paying various taxes, police said on Thursday.

These included the security transaction tax, capital gains tax, Maharashtra government stamp duty charges, SEBI turnover fees and stock exchange turnover revenue. The broker allegedly indulged in trading of shares outside the stock exchange without a valid licence.

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His turnover between March 23 and June 20 this year was Rs 4,672 crore, a police official said. The Mumbai Crime Branch had specific information about the broker doing dabba trading with the help of an application called Moody, without any valid licence from the stock exchange.

Broker raided

A Crime Branch team along with a squad of the National Stock Exchange and the Multi Commodity Exchange raided the broker’s office at Mahaveer Nagar in Kandivali area on Tuesday.

The police recovered Rs 50,000 in cash, five mobile phones, a laptop, a tab, a paper shredder and a pen drive from the office along with some important documents, the official said. During the probe, it came to light that the broker cheated the government by trading shares illegally and not paying taxes and fees.

An offence was registered under the Indian Penal Code sections 406 (criminal breach of trust), 420 (cheating), 120 (B) (criminal conspiracy) and 201 (causing disappearance of evidence of offence) as well as the Securities Contracts (Regulation) Act.

(With agency inputs)