Mumbai: The Enforcement Directorate has found that Octafx, accused of cheating Indian investors to the tune of Rs 800 crores, had used Indian Premier league (IPL) team Delhi Capitals to promote their forex trading App, whereas they were not authorized by either by BSE or SEBI to operate any trading terminal at that point.

ED had submitted prosecution complaint against the firm Octafx, which was promoted by Pavel Prozorov, from Barcelona, Spain to lure Indian investors and 52 other accused. The special PMLA court on Tuesday took cognisance of the complaint and issued summons to all the accused.

ED has claimed that the funds so collected from Indian investors have all been remitted out of India. Prozorov, the man at the center still remains at large. Meanwhile, his Anna Rudaia, a Russian national, acted as CEO and handled all the operations in India, managed to flee via Nepal.

The agency has claimed that, "OctaFx operates through aggressive promotional tactics, using shell companies to obscure the flow of funds and offering large leverage to attract traders. Their operations involve various manipulation tactics, likely aimed at ensuring traders lose money, thereby benefiting the company."

"The platform, operates under the guise of facilitating legitimate forex trading, has been deceitfully manipulating Indian users, exploiting the country's legal framework and financial systems. A tale of initial promises and subsequent deceptions, OctaFx meticulously crafted an image of a reputable trading platform. Potential clients were lured via compelling advertisements, referral-based incentive models and seamless trading experiences," ED has further alleged.

One of the way to build brand was to sponsor an IPL team. ED claimed that, OctaFx entered into agreement through its group company namely M/s Relegia Holdings Incorporated registered at British Virgin Islands and has paid Rs. 22 crores approx. to the owners of the team as sponsorship fees, which have been utilized by owner of the team for the payments of cricketers and staff members, ED alleged.

Further scrutiny by ED revealed that, M/s OctaFx India Private Limited applied to the Bombay Stock Exchange (BSE) on February 4, 2021 to sponsor the IPL team and advertise their brand. BSE granted approval the next day, on February 5. Presenting themselves as promoting stock trading in India, the company sought permission for IPL sponsorship. Once they had BSE's approval, they started advertising their brand and promoting the M/s OctaFx Trading App, which is used for Forex trading.

ED however claimed that the investigation revealed that "the trading app wasn't actually linked to M/s OctaFx India Private Limited , as they were not authorized by BSE or SEBI to operate any trading terminal. The investigation further suggested that the real motive behind these sponsorships and advertisements was to mislead Indian investors and push them toward Forex trading."

Joby Mathew, legal adviser of Octafx who was involved in seting up the company in India and its operations claimed that, "OctaFx has promoted itself IPL in violation of the codes of advertisements guidelines of BSE and SEBI." He further in his statement added that "OctaFx India Private Limited did not have any trading app as they advertised in IPL as they are not enabled with any trading terminal by the Indian regulator."

In and around November 2021, BSE inquired for information about an entity called OctaFx which was carrying on illegal activities by providing an unregulated online trading platform for trading in forex derivatives.

The compliance officer of OctaFx India Pvt Ltd however, had responded to it saying, neither OctaFx India Private Limited, nor its Promoter or shareholder, nor any of its group entities are involved in any illegal activities related to providing online trading platforms for trading in forex derivatives to the residents of India as OctaFx India Private Limited has not yet commenced or offered trading or related services in India or elsewhere or through its website or otherwise."

Another employee of OctaFx has claimed that, "M/s, OctaFx India Private Limited was into stock broking business and was planning to commence its operations from around July, 2022. The company was in its initial stage of business operations as it was trying to get NSE and CDSL licenses hence, no business operations were performed by the company as it never got the licenses. In around July, 2022, NSE informed that M/s. OctaFx India Private Limited will not be able to get licensed as SEBI has informed NSE to keep the licensing of M/s. OctaFx India Private Limited on hold. Thus, M/s. OctaFx India Private Limited could not get NSE and CDSL licenses. The name of the company was changed to M/s. Tauga Private Limited around November 2022."