Dentsu India in its defence to the ongoing Enforcement Directorate (ED) raids claimed that the suspected fraudulent activity was conducted by third parties and some of InDeed’s former employees. A case was filed in Mumbai’s Worli police station under the Prevention of Money Laundering Act (PMLA) against Dentsu Communications India Private Limited and Suumaya Industries Ltd and its promoters and some others.
The ED issued a press release stating that Suumaya group’s listed entities engaged in transactions totalling Rs 5,000 crore, with merely 10% being legitimate. The circular transaction pattern artificially inflated turnovers of involved entities, including Dentsu Communications India, misleading investors through falsely elevated share prices.
Dentsu India in its statement said, “In 2021, we identified suspected fraudulent activity conducted by third parties and some of InDeed’s former employees against whom criminal complaints have also been filed. This activity was limited to the InDeed business only. Three years ago, we proactively reported the matter to the relevant authorities and have been fully co-operating since.”
The company said, “It is in connection with the same matter that the Enforcement Directorate (“ED”) visited Dentsu India’s office in Mumbai on December 10, 2024. The ED has not found or seized any properties from Dentsu’s premises. We take fraud and wrong-doing very seriously with a zero-tolerance policy towards any such behaviour. We will continue to co-operate with the authorities.”
ED alleged that the suspects are accused of conspiring together and embezzling the funds to the tune of Rs 137 crore under the guise of promising future ‘Need to Feed’ program advantages. The investigations found that “trade financing” was secured from NBFCs (non-banking financial companies) under the pretext of a so-called ‘Need to Feed’ program of the Haryana government meant to supply agro products.
According to ED, accused persons had not received any contract from the Haryana government and there was no such program ever in existence either. The accused entities have, in fact, “never” supplied any agro product material for any such program. However, in order to create a fake impression that it is supplying agro products, the accused “connived” and created “fake” records including fake lorry receipts and fake invoices.
As per ED, Searches led to the disclosure that the listed entities of Suumaya Group entered into transactions worth Rs 5,000 crore, wherein only 10 per cent of the transactions were “genuine”. These transactions were done in a circular pattern that led to increase in turnover of involved entities including Dentsu India.
The law enforcement agency also alleged that the turnover of Suumaya Industries Ltd “increased” from Rs 210 crore to Rs 6,700 crore in a span of two years (from FY 2019-20 to FY 2021-22) which affected the share price to increase astronomically from Rs 19 per scrip to Rs 736 during this period.
The agency said it seized Rs 46 lakh in Indian currency, about Rs 4 lakh of foreign currency in cash, gold bars worth Rs 3.4 crore and “incriminating” documents related to immovable property transactions and some digital devices.