The owner of major Indian cash buyer Somap has been arrested in New Delhi over allegations of money laundering, according to Indian media reports.
The Times of India reported that officers of the Economic Offences Wing (EOW) of Uttar Pradesh state police arrested Dinesh Pandey on 20 November at the Delhi airport where he had arrived from Dubai.
Pandey did not immediately respond to TradeWinds' messages left on his mobile phone.
Robert Reid, Somap's London-based vice president, told TradeWinds that he had no more information than what is available in press reports.
This year, Indian media has chronicled a series of arrests in the so-called Bike Bot scam. The multilevel marketing scheme is being investigated by the EOW office in Meerut, near Pandey's home of Noida in the suburbs of New Delhi.
Starting in 2018, Bike Bot promoters connected to a company called Garvit Innovative Private Ltd solicited investments to purchase motorcycle taxis, with a promise of doubling investors' money within a year. They allegedly persuaded 225,000 would-be investors to part with some INR 35bn ($472m) on the Bike Bot scheme.
Garvit was led by Sanjay Bhati, who is among 19 people reportedly arrested in the Bike Bot investigation this year, up to and including Pandey. Banker Vinay Sharma, of the Noida-based Noble Co-operative Bank, was also arrested the day before Pandey.
The Times of India cited EOW investigators as believing Pandey was the scheme's main money launderer.
Howver, the reports did not mention Pandey's ship recycling business or Somap in connection with money laundering.
The reports cited EOW investigators as saying Sharma set up accounts for Garvit and sister companies, and that funds from those accounts were laundered by investments done through organisations owned by Pandey.
'Construction projects'
They quote EOW (Meerut) police superintendent Ram Suresh Yadav as saying Pandey claimed to have invested INR 1.5bn in Bike Bot cash in "construction projects, land investments and trusts".
"He eventually returned [INR 600m], but the remaining [INR 900m] is still unaccounted for," the police superintendent told the Times of India.
Somap, which is a long-established cash buyer, has frequently made headlines for controversial deals, including the alleged beaching in Bangladesh last year of an Evergreen Marine Corp containership that had been sold on condition of green recycling.
But Somap has also won plaudits from the market for honouring money-losing purchase commitments in the volatile scrap steel market.
TradeWinds quoted a BRS shipbroker praising Somap for following through on a 2003 deal despite a steel-price crash.
"The delivery was successfully concluded without any kind of discussion or renegotiation on the part of the buyers, despite the fact that demolition prices have fallen substantially," the broker remarked.
