The Enforcement Directorate (ED) has launched a major enforcement action against NSE-listed Debock Industries Ltd, targeting its chairman Mukesh Mahavar and several associates in connection with a ₹49 crore financial scam. The operation, conducted under the Prevention of Money Laundering Act (PMLA), revealed serious irregularities in the company’s financial practices, including misappropriation of investor funds raised through a rights issue.
Fraud Through Rights Issue and Shell Companies
The investigation centers on the June 2023 rights issue floated by Debock Industries, in which the company raised ₹49 crore from retail investors. According to ED sources, the promoters submitted fabricated bank statements and sales data to falsely elevate the company’s financial health. These manipulated documents were reportedly used to list the company on the NSE main board and attract investor interest.
ED officials allege that Mahavar and his associates rerouted the raised funds through a network of shell companies, ultimately using them for personal investments and luxury acquisitions. The money was not utilized for legitimate business expansion as claimed.
Additionally, the company’s directors included individuals from junior-level staff—appointed without any actual managerial responsibility—to give a misleading impression of a structured and professional management team.
Luxury Cars and Unaccounted Cash Seized
The enforcement operation led to the seizure of ₹78 lakh in unaccounted cash and a fleet of luxury vehicles from premises linked to the accused. Among the vehicles confiscated were:
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A Rolls Royce Phantom
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A Bentley Mulsanne
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A Mercedes-Benz G-Wagon (Brabus edition)
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A Toyota Land Cruiser
These high-end automobiles were allegedly purchased using diverted funds, disguised as business expenses or routed through fake invoices and benami transactions.
Wider Implications and Investigation Status
The ED’s action against Debock Industries is part of a broader effort to crack down on corporate financial fraud, especially cases involving listed companies and misuse of public investment instruments like rights issues. Officials believe the accused may have used offshore accounts and real estate investments to launder funds, and further probes into international transactions are underway.
The agency is examining digital records, financial statements, property documents, and communications to build a comprehensive case. More seizures, arrests, or summons are expected as the investigation proceeds.
This case serves as a stark warning to promoters misusing market mechanisms and investor trust. The ED’s crackdown aims to restore confidence in India’s securities markets by demonstrating that white-collar financial crimes will be met with firm legal consequences.
