Sumaya Group's ₹35 crore assets seized: ED uncovers ₹5,000 crore fake trade scam

Mumbai (The Uttam Hindu): The Mumbai Zonal Office of the Enforcement Directorate (ED) has taken major action against M/s Sumaiya Group and its associates under the Prevention of Money Laundering Act (PMLA), 2002. The agency has provisionally seized movable and immovable properties worth approximately Rs 35.22 crore.

These include movable assets such as bank balances, demat holdings and mutual funds, as well as two immovable properties. The action is part of an investigation initiated on the basis of an FIR lodged at the Worli police station. The police had registered a case against Sumaya Industries Limited, its promoters and other individuals and entities under various sections of the Indian Penal Code (IPC), 1860. It is alleged that these individuals embezzled an amount of Rs 137 crore by luring people with the promise of future benefits under the 'Need to Feed Programme'.

The ED investigation has revealed several shocking revelations. The Sumaya Group and its associates fabricated a fake Haryana government contract to obtain funds and trade financing. Under this guise, they presented non-existent business activities as real turnover.

The investigation revealed that promoter Ushik Gala, through an agent, diverted funds from group companies to fictitious agricultural trading entities in Delhi and Haryana. The purpose was to create false purchases that appeared genuine. No agricultural produce was actually purchased. Instead, the diverted funds were returned to Ushik Gala through a mix of cash and RTGS entries from other shell companies.

In this scam, the Sumaya Group orchestrated a large-scale fraudulent trade scheme. They created fake invoices and lorry receipts, resulting in circular transactions worth ₹5,000 crore. Only about 10 percent of these were genuine. These transactions were conducted in a circular manner, artificially inflating the turnover of all the entities involved. As a result, the Sumaya Group's turnover increased from ₹210 crore to ₹6,700 crore in two years. This led to a massive surge in share prices and a false picture of the group's listed companies, misleading investors into believing the company was growing rapidly, when in fact, the entire scam was fraudulent.

Earlier, during the investigation, the ED conducted searches at 19 locations in Mumbai, Delhi, and Gurugram. These raids resulted in the seizure of movable assets worth ₹3.9 crore. A large quantity of financial documents, digital records, and evidence related to money laundering and fund diversion were also recovered. Furthering the investigation, the ED arrested Ushik Gala, promoter of the Sumaya Group of Companies, on November 17 under Section 19 of the PMLA.

The agency says this arrest is a significant step toward apprehending the main accused in the scam. The ED is now investigating the matter more thoroughly to ensure all perpetrators are brought to justice and investors receive justice. This action reflects the government's strict policy against financial fraud, cracking down on those who create shell companies and harm the economy.