Mumbai: Three share brokers arrested in 'dabba trading' case

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Mumbai Police arrested three more stock brokers for their alleged involvement in illegal trading of shares, also called 'dabba trading,' the police said on Wednesday, according to the PTI.

The trio used to allegedly get commission from the main accused in the case, who was arrested by the police earlier this month, for bringing investors, an official told the news agency.

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The Unit 11 of the Mumbai crime branch, which is probing the case, made the latest arrests from suburban Kandivali, Dahisar and Borivali areas respectively on Tuesday evening, he added.

'Dabba trading' denotes illegal share trading outside the purview of recognized stock exchanges.

The police had arrested the kingpin of the racket, a 43-year-old man, on June 20.

According to the police, his turnover during the period between March 23 to June 20, 2023, was a whopping Rs 4,672 crore, the police official said, as per the PTI.

He is accused of cheating the government of more than Rs 1.95 crore by not paying various taxes such as the security transaction tax, capital gains tax, stamp duty, SEBI turnover fees and stock exchange turnover revenue.

The Mumbai Police had earlier this month said, the 'dabba trading' is an illegal form of trading in shares, where operators of such trading rings allow people to trade in equities outside the stock exchange platform.

The accused, who was arrested from suburban Kandivali, allegedly cheated the government of more than Rs 1.95 crore by not paying various taxes, like the security transaction tax, capital gains tax, state government stamp duty charges, SEBI turnover fees and stock exchange turnover revenue, the police official told PTI.

The official said that the broker allegedly indulged in trading of shares outside the stock exchange without a valid licence and his "turnover between March 23 to June 20, 2023 was Rs 4,672 crore."

The Mumbai crime branch had specific information about the share broker who was doing 'dabba trading' with the help of an application called 'Moody', without any valid licence from the stock exchange. Accordingly, a crime branch team along with a squad of the National Stock Exchange (NSE) and the Multi Commodity Exchange (MCX) officials raided the share broker's office at Mahaveer Nagar in Kandivali area on Tuesday, the official said.

The police recovered Rs 50,000 cash, five mobile phones, a laptop, a tab, a paper shredder and a pen drive from the office along with some important documents, the official told PTI.

During the probe, it came to light that the broker cheated the government by trading shares illegally and not paying taxes and fees worth more than Rs 1.95 crore, he said.

(with PTI inputs)