The stock market has seen significant turbulence recently, particularly affecting penny stocks and small-cap companies. One name, however, seems to be at the center of this storm—Hari Shankar Tibrewala, a Dubai-based businessman.
But how did Tibrewala allegedly influence the stock market, and why are his actions under intense scrutiny? Let’s dive into the details of his involvement in a massive betting scam and its link to market manipulation.
The Mahadev Betting Scam: Where It All Began
The story begins in the mid-2010s in Chhattisgarh, where a young man named Saurabh Chandrakar opened a juice stall called Mahadev Juice Centre. Despite previous business failures and a gambling habit, Chandrakar was determined to succeed. He soon met Ravi Uppal, another gambler turned businessman, and together they decided to enter the world of illegal betting.
In 2017, the two launched Mahadev Book, a gambling app that allowed users to place live bets on sports such as cricket and football. With the help of a successful betting app operator, Reddy Anna, they scaled their business and quickly became successful. By 2019, they had moved to Dubai, where they continued to amass enormous wealth.
This sudden fortune raised red flags, especially when Chandrakar spent ₹200 crore on a lavish wedding in 2023. India’s Enforcement Directorate (ED) began an investigation, which revealed that the gambling app’s operations were entirely illegal, leading to the arrest of both Chandrakar and Uppal.
Hari Shankar Tibrewala’s Role in the Scandal
Enter Hari Shankar Tibrewala, a Dubai-based businessman who allegedly partnered with Chandrakar and Uppal in running a variant of the Mahadev Book app called Skyexchange. Tibrewala’s operation involved funneling money from customers into a network of money operators, who would then deposit these funds into various bank accounts, both domestic and foreign.
According to the Enforcement Directorate, a significant portion of this illicit money—around ₹1,100 crore—found its way into Indian stock markets, primarily invested in smaller, less liquid stocks. These included companies like Tiger Logistics, Toyam Sports, and Gogia Capital Services. The objective? Price manipulation. Tibrewala and his associates allegedly engaged in a pump-and-dump scheme, artificially inflating stock prices to deceive retail investors into buying, before cashing out at a profit.
Market Manipulation and Its Impact
The ED has taken action by freezing ₹1,100 crore worth of shares held in demat accounts linked to Tibrewala. While not all 30 stocks under suspicion were necessarily manipulated, many of them showed signs of artificial price inflation. For instance, Gensol Engineering, a solar utility company, saw its stock surge after Hari Shankar Tibrewala’s company, Zenith Multi Trading DMCC, took a stake in the firm. Despite Gensol’s statement denying any operational involvement from Zenith, the stock’s meteoric rise was a red flag for investors.
Several companies connected to Hari Shankar Tibrewala have seen their stock prices plummet by as much as 30% recently, further fueling suspicions that his actions played a role in the market rout. These developments have led many to blame Hari Shankar Tibrewala for the recent volatility, though it’s essential to acknowledge other factors at play, including market warnings from SEBI about smaller stocks and the broader weakness in global stock markets.
Conclusion: Is Tibrewala Responsible for the Market Crash?
While it’s imprudent to solely blame Hari Shankar Tibrewala for the current stock market downturn, his involvement in illegal betting operations and market manipulation has certainly raised alarms. The financial chaos around certain stocks, combined with the ED’s investigation into his illicit activities, highlights the dark side of the stock market—where large sums of unaccounted money can distort pricing and investor confidence.
As the investigation continues, it’s clear that Hari Shankar Tibrewala’s role in market manipulation will remain a point of concern for both regulators and investors alike.
