The city crime branch arrested four stock brokers for allegedly involved in dabba trading, a proxy stock market trading. During it's probe, the crime branch found transactions worth over ₹ 6000 crore by the accused from last one and half year. Following the revelation, the investigation has been transferred to the Economic Offences Wing (EOW).
According to officials, the crime branch unit 7 officials conducted raid at the stock brokers office in Ghatkopar on Wednesday and found illegal stock trading was underway, during the raid four persons identifed as Rajesh Patel, Mahesh Kataria and Jethalal Bhanushali along with another person have been arrested. They were produced before the Esplanade court which sent them police custody.
According to the officials, dabba trading, a proxy stock market, enables an operator to illegally trade the stock outside the market on the basis of the prices quoted on exchanges. The settlement in these exchanges, is however, executed in cash. Unlike the traditional trading, in which a person has to open a Demat account with a broker, in Dabba trading, the investor operates in a parallel proxy market. This type or trading is risky but profitable, said official.
The Dabba trading seem to have its own set of rules and regulations, and has no tax profits or any Commodities Transaction Tax (CTT) or Securities Transaction Tax (STT), as the trading itself is illegal, added the official.
ALSO READMSC Bank fraud: ED searches underway in Mumbai and Pune at residence of close aide of Maharashtra...
(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)