ED Raids Entities Over NSE Unlisted Share Scam

• Editor
• March 9, 2026
• Banking & Finance, Business, Economy, Global Business
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As of March 9, 2026, the Enforcement Directorate (ED) has intensified its crackdown on a “grey market” syndicate exploiting the hype surrounding the National Stock Exchange (NSE) IPO. On February 27, 2026, simultaneous raids were executed at eight strategic locations across Mumbai and Chennai.

The agency’s Headquarters Investigation Unit (HIU) is probing a sophisticated money-laundering scheme involving the fraudulent sale of non-existent unlisted NSE shares.

I. The Modus Operandi: Selling “Ghost” Equity

The ED investigation reveals that the accused operated as an organized cartel, leveraging the “Fear Of Missing Out” (FOMO) associated with the NSE’s long-awaited public debut.

• The Pitch: The syndicate approached high-net-worth individuals (HNIs) and retail investors, claiming to hold significant blocks of NSE unlisted shares. They offered these for transfer at a heavy premium via private Share Purchase Agreements.
• The Deception: Federal investigators found that the group did not actually possess the shares they were selling. Because unlisted shares are traded “off-market” and are not governed by exchange settlement mechanisms, the cartel exploited this regulatory gap to collect massive advance payments.
• The Money Trail: Funds received from investors were reportedly layered through multiple bank accounts and subsequently diverted into high-end real estate and other movable/immovable assets, now classified as “Proceeds of Crime.”

II. Key Entities & Individuals Under the Scanner

The enforcement action has targeted specific firms and their leadership, many of whom were previously booked by the Mumbai Economic Offences Wing (EOW) in 2025 for a similar ₹26.5 crore fraud.

III. Asset Seizures & Enforcement Action

Under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, the ED has moved to paralyze the syndicate’s financial operations:

• Account Freezes: Dozens of bank and demat accounts linked to Satish Kumar, Sanjay Damani, and their respective firms have been frozen under Section 17(1A) of the PMLA.
• Evidence Recovery: During the search operations, officials seized incriminating digital records, property-related documents, and details of financial trails that map the diversion of investor funds.
• Scale of Fraud: While the initial EOW FIR cited a ₹26.5 crore loss for specific investors, the ED’s pan-India investigation suggests the total quantum of the fraud could be significantly higher as more victims come forward.

IV. Market Context: The IPO “Frenzy”

This crackdown comes at a pivotal moment for the National Stock Exchange.

• IPO Status: NSE CEO Ashish Chauhan recently confirmed that the exchange has received a No-Objection Certificate (NOC) from SEBI.
• Timeline: The exchange is currently drafting its Red Herring Prospectus (DRHP) with an aim to list by late 2026. This official progress has inadvertently fueled a speculative surge in the unlisted market, which scammers are now milking.

V. Critical Investor Guardrails

To avoid falling victim to “pre-IPO” scams, market analysts and the ED recommend three primary checks:

1. Demat Holding Verification: Never transfer funds based on an “agreement” alone. Demand a recent Client Master Report (CMR) or a holding statement directly from the depository (NSDL/CDSL).
2. Verified Intermediaries: Only deal with reputed unlisted share brokers who have a verifiable track record of successful share transfers.
3. Recognized Channels: Ensure all transfers are executed through the official depository system. If a seller insists on a “private off-market transfer” without involving a demat account, it is a major red flag.