The Enforcement Directorate (ED) reportedly conducted search operations at multiple locations across Mumbai in connection with its ongoing investigation against M/s Varanium Cloud Ltd., its promoter Harshavardhan Sabale, and other associated entities, official sources said on Tuesday.
The ED’s Headquarters Investigation Unit in New Delhi carried out the searches based on credible intelligence indicating large-scale manipulation of financial records, circular fund movements, and suspected laundering of proceeds of crime, they said.
According to ED officials, Varanium Cloud Ltd. and its group companies allegedly raised around Rs 40 crore through an Initial Public Offering (IPO) in September 2022, claiming the funds would be used to set up edge data centres and digital learning hubs in smaller towns. The company had projected itself as a fast-growing technology firm in digital media, blockchain, and EdTech, and had allegedly used the names of reputed business groups and media outlets to attract investors.
However, the agency claims that the promised projects were never executed and that the IPO proceeds were diverted through fictitious transactions and circular fund movements to artificially inflate turnover and market value. The ED further stated that subsequent trading patterns reflected artificial price escalation followed by heavy offloading of shares — consistent with a “pump-and-dump” scheme — allegedly causing losses to genuine investors.
During the searches conducted on October 29, 2025, the ED reportedly uncovered a large network of mule bank accounts opened using forged KYC documents and dummy SIM cards. The agency said it seized over 400 chequebooks, more than 200 SIM cards (found in about 100 dual-SIM mobile phones), and several electronic devices, including laptops and hard drives, that allegedly contain incriminating evidence.
According to the ED, these bank accounts were used for layering and routing funds through more than 150 shell and dummy companies to conceal the origin of illicit money. The findings, officials said, expose a well-coordinated racket of “drawer companies” operated from small rented offices, where fake identities, mule accounts, and proxy communication channels were systematically employed to disguise fund movements.
The agency added that several connected individuals and entities have been identified and are currently under scrutiny. Further investigation is in progress.
