Mumbai: The Enforcement Directorate (ED) has carried out search operations at multiple locations in Mumbai on October 29 under the Prevention of Money Laundering Act (PMLA), 2002, in connection with an ongoing Rs 40-crore money laundering probe against Varanium Cloud Ltd, its promoter Harshavardhan Sabale, and associated entities, the agency said on Tuesday.
The searches were launched following intelligence inputs suggesting large-scale manipulation of financial records, circular fund movements, and laundering of crime proceeds. During the operation, officials seized over 400 cheque books, 200 SIM cards, and more than 100 mobile phones linked to mule bank accounts allegedly opened using forged KYC documents. These accounts were reportedly used to layer funds through over 150 shell and dummy firms. Laptops, hard drives, and other digital evidence were also recovered.
ED Raids Varanium Cloud In ₹40-Crore IPO-Linked Money Laundering Probe; Unearths 150 Shell Firms, Fake KYC Network | File Photo
According to officials, Varanium Cloud Ltd and its group entities had raised about Rs 40 crore through a September 2022 IPO, claiming the funds would be used to establish edge data centres and digital learning hubs in smaller towns. The company positioned itself as an emerging player in digital media, blockchain, and EdTech, even invoking associations with reputed business groups and media houses to attract investors. However, officials found that none of the promised projects were executed and the IPO proceeds were diverted through fictitious transactions to artificially inflate the company’s turnover and market value. The ED suspects the firm was involved in a “pump and dump” scheme, where shares were artificially inflated through misleading claims before being offloaded at higher valuations, causing losses to retail investors.
According to the ED’s statement, analysis of the seized material revealed a sophisticated financial racket operating from small offices in Mumbai, where “drawer companies” were used to create layers of fake transactions. The accused allegedly deployed multiple mule accounts, forged documents, and proxy communication channels to conceal the money trail and launder illicit gains.
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Officials said the ongoing probe aims to trace the end beneficiaries of the diverted funds and examine the role of intermediaries who facilitated the fraudulent transactions. More seizures and possible arrests are expected as the ED continues forensic analysis of the recovered data.
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