Crime branch arrests three more in a dabba trading racket

Mumbai police have arrested three more individuals in connection with an illegal 'dabba trading' racket, bringing the total number of arrests to four. The arrested individuals were working as coordinators between customers and the alleged mastermind, Jatin Mehta. The transactions were worth around ?4,672 crore ($660 million) and caused a revenue loss of crores of rupees. The police have also found evidence of hawala transactions and will be investigating further.

MUMBAI: Three more accused have been arrested by the Mumbai crime branch on Wednesday in connection with running an illegal ‘dabba trading’ racket.

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Last week, the police arrested share broker Jatin Mehta, 45, a Kandivali resident and found that the transactions were worth around ₹4,672 crore and caused a revenue loss of crores of rupees.

Dabba or box trading refers to an illegal practice of trading that takes place outside the purview of the stock exchanges. Simply put, it is gambling centred around stock price movements.

Police officials said that the three accused were working as coordinators between customers who were investing money in share trading and the arrested mastermind, Mehta.

The arrested trio are identified as Vijay Gada, 28, Vijay Rathod, 57, and Hiten Makwana, 45.

The police said Gada is a resident of Kandivali while Makwana is from Borivali and Rathod is from Dahisar. They all are middlemen who coordinated between the customers and Mehta. We have found a list of 25 people who had invested money in illegal trading. We have also stumbled upon some hawala transactions and will investigate those as well,” said a crime branch officer.

Hawala, sometimes referred to as underground banking, is a way to transmit money without any currency actually moving.

Last week, police inspector Vinayak Chavan of unit 11 of the crime branch received input that an illegal trading operation was being run from an office in a building in Mahavir Nagar area of Kandivali West. The crime branch unit along with representatives of the National Stock Exchange (NSE) and Multi-Commodity Exchange (MCX) of India, raided the place and found that Mehta did not have any licence or permission to trade in shares.

Mehta was allegedly found to be running an illegal share trading business, using an application and duped the government by avoiding payment of various taxes. The joint team raided Mehta’s office. During the raid, the crime branch also seized ₹50,000 in cash and five mobile phones along with a laptop, tab and other electronic equipment from the office, said the police official. He added that the equipment was used for illegal share trading. Mehta was using an application and was making spot trading, said a police officer.

After checking the list of trading – mostly done in cash – the police found in Mehta’s laptop that the volume of the share trading between March 2023 and June 20 done by the accused was around ₹4,672 crore.

During further investigation the police learnt that Mehta caused revenue loss to the tune of ₹1.95 crore by avoiding payments of security transaction tax and capital gain tax, state government stamp duty, SEBI turnover fees, stock exchange trading revenue.