An insider-trading-cum-betting racket, which caused an estimated annual loss of Rs. 84 crore to the exchequer, has been busted at Kucha Mahajani — a small gold trading district in Chandni Chowk.
Three people have been arrested in connection with the scam, which centred around 2,000 city-based businessmen exploiting inside information on fluctuating gold prices, said Ravindra Yadav, additional commissioner of police (crime).
Explaining how the accused were abusing technology for the sheer thrill of making a quick buck, Yadav said: “The racket was going on for the past two years. A cable operator would relay fluctuating rates of commodities traded on the MCX (Multi Commodity Exchange) through an intricate network of cable connections on which bets valued between Rs. 20 and 30 crore would be placed by gold merchants on a daily basis.”
According to officers associated with the investigation, the scam caused an estimated loss of R84 crore to the Central exchequer “on an annual basis”.
The arrested trio has been identified as Krishan Aggarwal, 43, an online trader, Vishal Kumar, 33, a businessman and Manish Jain, 39, a post-graduate bookie.
“On Tuesday, Inspector Sunil Kumar and SI Ritesh conducted a raid on Aggarwal’s premises based on an input that he and his associates were indulging in betting.
A laptop, Rs. 4.7 lakh in cash, a television, calculators, note pads, mobile phones, and other incriminating documents showing transactions of crores of rupees have been recovered from their possession,” said additional CP Yadav.
The Multi Commodity Exchange of India Ltd (MCX) is an independent commodity exchange which was established in 2003 and is based in Mumbai. It offers futures trading in bullion, ferrous and non-ferrous metals, energy, and a number of agricultural commodities.
A member or client who opts for trading in MCX is supposed to pay a certain amount of commission or tax to the department or person concerned.
Different rates per crore as transaction fee on different commodities — mainly metals such as gold, silver — is paid to the MCX as taxes. The system aims to eliminate the use of black money by routing the money through specific banks.
“The gambler would place the bet on the rates of gold and silver on telephone as well in cash on the online rates. More arrests will follow,” Yadav added.