Markets

NSE Co-lo scam: I-T unearths undisclosed foreign, hawala deals by OPG Securities

PALAK SHAH | | Updated on: Jun 21, 2022

Promoter Sanjay Gupta denies all allegations

The income-tax (I-T) department has discovered Delhi broker OPG Securities, named among the key beneficiaries in the National Stock Exchange (NSE) Co-location scam, had alleged huge undisclosed foreign transactions, hawala deals, cash payments for multi-crore property purchases and operated a ring of cross country trading servers illegally with linkages to NSE, BSE and MCX. 

Documents, seen by BusinessLine, show that all this was unearthed in I-T raids on OPG Securities, its promoters and linked entities. I-T search revealed that OPG promoter Sanjay Gupta ran a club/restaurant named Haveli in the UAE, was involved in physical gold trading between Ghana and Dubai, and bought a ₹25-crore property in Delhi’s Preet Vihar, for which only ₹8 crore were paid in cheque.

I-T Department conducted raids based on leads in the NSE scam and reports were submitted to the Central Bureau of Investigations (CBI) and market regulator SEBI. 

Among the undisclosed foreign transactions, I-T found that Gupta operated an international arbitrage and trading business through an entity called Richr Business Services. An MoU was found during the raids.

“OPG undertook transactions through Richr and funds sent via Hawala to Dubai,” I-T report said. OPG and Richr had undisclosed international trading accounts with a number of foreign brokers.

The I-T Department also found other undisclosed entities linked to OPG and Gupta including Blue Ideas FZE, Futures International FZE, AR Fortune, Ever Express Shipping, Acceltrade Corporation, USA and Dubai (a coupany found in SEBI’s COLO report) and CitiBulls DMCC, which had trading accounts with foriegn brokers.

I-T department has made a request for more information from foreign jurisdictions through CBDT. For entities based in Hong Kong, details regarding bank accounts were sought via Multi Legal Assistance.

When contacted, Gupta said in a WhatsApp message, “The statements are false, baseless, devoid of facts and denied. I-T proceedings are sub-judice, in court. I sincerely request you to desist from publishing a story devoid of facts as the same will cause grave prejudice and irreparable loss of reputation to me and my business.”

Gold trading

OPG was also trading in physical Gold through Blue Ideas and transactions with Sahara Royal Gold Refinery, Ghana was unearthed. Emails, statements, travel documents, WhatsApp conversations etc related to Gupta and entities linked to him were found. Cash deposits in foreign jurisdictions on the instructions of OPG promoters were found for Sahara Gold. The I-T report recommended that the assessing officer treat these as unaccounted foreign transactions and undertake suitable action under the Black Money (Undisclosed Foreign Income and Asset) and imposition of Tax Act, 2015. 

The report also states that a company SigmaQuant Technologies was part of OPG and had huge unaccounted transactions. India has sought data from the US Department of Justice, too, for some of these transactions. 

Gupta and OPG have challenged various findings of I-T, disowned many transactions and blamed manipulated records on business rivals. But I-T says transactions found were not in isolation but part of sheets with continuity, including balances at various dates, etc.  

A source close to OPG claimed that these were preliminary findings an old report and final assessment orders of entities including OPG had not raised tax demands. They said the assessment orders between 2016 and 2019 of OPG, SigmaQuant and Acceltrade had no recoveries mentioned.

Investigations by SEBI had found that OPG got preferential access to NSE, along with few other brokers, between 2010 and 2015 and that former MD and CEO of the exchange Ravi Narain had a meeting with Gupta. 

SEBI’s probe also revealed that Narain’s then deputy Chitra Ramkrishna and other senior NSE officials would immediately adhere to Gupta’s requests regarding server connections. During his interrogation, Narain had denied that he met Gupta but SEBI found emails about the meeting.

Published on June 20, 2022
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