ED Raids 8 Locations in NSE ‘Unlisted Shares’ Investment Fraud Probe

The Enforcement Directorate (ED) has conducted searches at eight locations across Mumbai and Chennai as part of a money laundering investigation into an alleged investment fraud involving so-called “unlisted” shares of NSE India Ltd.

The raids were carried out on February 27 by the agency’s Headquarters Investigation Unit under provisions of the Prevention of Money Laundering Act, the ED said in a statement.

Entities and Individuals Under Scanner

The enforcement action targeted several entities, including Atum Capital Pvt Ltd, Optimus Financial Solutions Pvt Ltd, Babli Investment Pvt Ltd, and Supremus Angel, along with their directors.

Among the individuals named in the investigation are Satish Kumar, Sanjay Damani, Neeraj Nisar, Krish Vohra, Manish Soni, and Nisha Kumari. The ED alleges that the group operated as a cartel that misled investors by promising allocations in unlisted shares of the National Stock Exchange of India.

Alleged Modus Operandi

According to investigators, the accused approached investors claiming they owned shares of NSE and could transfer them at a premium through private share purchase agreements. However, the agency said the group did not actually possess the shares they were offering to sell.

Since the shares of the National Stock Exchange of India are not listed on any stock exchange, they are not traded through platforms such as NSE or BSE, nor are they governed by exchange settlement mechanisms. The ED said the accused exploited this lack of formal oversight in private transactions to collect large advance payments from investors.

Assets Traced and Accounts Frozen

Investigators also found that funds collected from investors were routed through multiple bank accounts and allegedly diverted into movable and immovable assets. During the searches, officials seized property-related documents, digital records, and other materials described by the agency as incriminating.

The ED has also frozen several bank and demat accounts linked to Satish Kumar, Sanjay Damani and associated entities under Section 17(1A) of the Prevention of Money Laundering Act, citing evidence of suspected “proceeds of crime.”

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Rising Demand for NSE Shares

The investigation comes at a time when interest in National Stock Exchange of India shares has been increasing in the private market ahead of a potential public listing.

In an interview with CNBC-TV18, Ashish Chauhan said the exchange had received a no-objection certificate from the Securities and Exchange Board of India for its proposed initial public offering and was preparing the draft red herring prospectus.

Chauhan noted that preparing the filing could take three to four months, followed by two to three months of regulatory review, putting the potential IPO timeline at around seven to eight months, with the exchange aiming for a listing by the end of the year.

Investor Caution

Market participants say the long-anticipated IPO has fuelled demand for the exchange’s shares in the unlisted market, where transactions occur privately between buyers and sellers rather than through regulated exchanges.

Investigators caution that such demand can create opportunities for fraudulent intermediaries to misrepresent ownership. Investors are advised to verify a seller’s actual shareholding through demat records and ensure transfers are executed through recognised depository systems.

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