Hyderabad: The Abids police, on Wednesday registered a case against a private firm for indulging in illegal commodity trading activities and are questioning the proprietors.
According to the office of Central Zone Deputy Commissioner of Police Akun Sabharwal, Rupiah Investments at Chirag Ali Lane, was booked after the police received information that it was indulging in commodity derivatives market.
This illegal activity involves transactions called ‘Dabba Trading’. ‘Dabba Trading’ is the process used by brokers to route their client’s trades outside the stock exchange. The broker executes orders on his own and saves transaction costs.
This is a parallel system achieved by brokers with large volumes of trades and clients and is an unlawful event since many people lose their lifelong savings.
The Indian Dabba trade is a variation of the American Bucket Shop Operations of the 1920s, which were known to have mafia links. In India also, a sizeable number of brokers and sub-agents especially in Mumbai and Gujarat are known to have links with the underworld.
A case under section 20 (C) and (D) Forward Contracts (Regulation) Act 1952 has been registered and investigation taken up. As part of investigation, the premises of the firm were searched. Financial documents recovered are being analysed and computers and other peripherals used in the illegal trade have been ‘electronically’ sealed.
The proprietor of the firm Sachin Pitti and his partner Navneet are being questioned by the Police.
The Forward Markets Commission of Ministry of Consumer Affairs has been approached to render technical assistance to the city police in this case, the DCP office said. (INN)