The Enforcement Directorate (ED) is investigating Nishant Pitti, CEO of EaseMyTrip, in connection with the Mahadev betting app case.

The inquiry expands scrutiny to Pitti due to allegations involving the manipulation of stock prices of 25 listed companies.

Pitti is accused of collaborating with operators who reportedly used funds from the illegal betting app.

The ED claims he was aware of the activities of Sky Exchange, a betting platform linked to the Mahadev app.

His company allegedly made payments to two shell companies associated with it.

The investigation is ongoing, and Pitti has not publicly commented on the allegations.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ The expanding web of stock market manipulation via illegal betting proceeds

The Mahadev betting app case reveals a sophisticated money laundering operation where illicit gambling proceeds were channeled into stock market manipulation, extending beyond just EaseMyTrip.

The Enforcement Directorate has conducted over 170 raids in this case, seizing assets worth ₹3,002.47 crore and cash totaling ₹3.29 crore, indicating the substantial scale of the operation 1.

This pattern of using proceeds from illegal betting to artificially inflate stock prices appears to have targeted multiple small and medium enterprises, with the ED flagging suspicious stock manipulations to SEBI for investigation 2.

The method allegedly involved routing funds through shell companies and benami bank accounts before investing in targeted stocks, creating artificial price fluctuations that ultimately harmed retail investors 2.

The investigators found that the operators allegedly obtained beneficial shareholding positions (Benpos) from company promoters, creating an information arbitrage that allowed coordinated trading based on non-public information.

2️⃣ India’s regulatory challenges in combating the massive illegal betting market

The Mahadev case exemplifies India’s broader struggle with an enormous illegal betting market estimated at $20-100 billion annually, dwarfing the legal gaming sector which is valued at just $3 billion 3.