ED arrests Suumaya promoter in Rs 137 cr fraud through Dentsu's CSR programme

The Enforcement Directorate has arrested Ushik Gala, promoter of the Suumaya Group of companies, in connection with an alleged money-laundering scheme involving fraudulent trade financing and fund diversion.

According to several media reports, the case involves Dentsu Communications India Pvt. Ltd., Suumaya Industries Ltd., their promoters and others, who are accused of embezzling about Rs 137 crore through a purported ‘Need to Feed’ programme.

The arrest was made on November 17 by the agency’s Mumbai Zonal Office under Section 19 of the Prevention of Money Laundering Act. A court has remanded him to ED custody until November 24. The investigation stems from an FIR filed at Worli Police Station and later transferred to Mumbai Police’s Economic Offences Wing.

According to ED, its probe indicates that the Suumaya Group, along with some employees of Dentsu India, “concocted a bogus Haryana government contract under the guise of the ‘Need to Feed’ programme to obtain funds through trade financing,” and projected non-existent business operations as genuine.

The ED said funds received by entities were diverted by Gala to dummy agro-trader firms in Delhi and Haryana through an agent. Investigators said no actual agricultural purchases occurred and that the money was routed back to Gala through cash and RTGS transfers from shell companies.

Investigators also allege that the alleged promoter’s company generated fake invoices and lorry receipts to simulate large-scale trade, creating circular transactions of about Rs 5,000 crore, of which only around 10% were genuine. According to the ED, these inflated transactions boosted Suumaya’s reported turnover from Rs 210 crore to Rs 6,700 crore within two years and drove a sharp rise in the share price of its listed entities, “thereby giving a misleading picture to investors.”

Earlier searches at 19 locations in Mumbai, Delhi and Gurgaon resulted in the seizure of movable assets and extensive financial and digital records. The agency said the materials seized contain evidence of fund diversion and money laundering.

Further investigation is underway.