Mumbai: Broker Arrested For Illegal 'Dabba' Trading; Made Transactions Worth ₹4,672 Crore In 3 Months

The Mumbai Police earlier this week arrested a 45-year-old share broker who allegedly indulged in illegal 'dabba trading' with transactions worth Rs 4,672 crore in nearly three months, an official told PTI on Thursday. The Mumbai crime branch had specific information about the share broker who was doing 'dabba trading' with the help of an application called 'Moody', without any valid licence from the stock exchange, the official added.

The accused, Jatin Sureshbhai Mehta, was arrested from suburban Kandivali on Tuesday. He allegedly cheated the government of more than Rs 1.95 crore by not paying various taxes, like the security transaction tax, capital gains tax, state 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 and his "turnover between March 23 to June 20, 2023 was Rs 4,672 crore," reported PTI.

What is Dabba trading?

'Dabba trading' is an illegal form of trading in shares, where operators of such trading rings allow people to trade in equities outside the stock exchange platform.

Raid at stock brokers office in Kandivali

Accordingly, a crime branch team along with a squad of the National Stock Exchange (NSE) and the Multi Commodity Exchange (MCX) officials raided the share broker's office at Mahaveer Nagar in Kandivali area on Tuesday, he said.

According to the official, the police during the raid on Tuesday recovered Rs 50,000 cash, five mobile phones, a laptop, a tab, a paper shredder and a pen drive from the office along with some important documents.

During the probe, it came to light that the broker cheated the government by trading shares illegally and not paying taxes and fees worth more than Rs 1.95 crore, he said.

Based on a complaint, an offence was registered under 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 provisions of the Securities Contracts (Regulation) Act and the accused was placed under arrest, he said.

With inputs from PTI