Indian Police Crack Down on XDirect in Mumbai for Illicit Trading

XDirect is registered in Mauritius though the company failed to procure a license to provide FX services following an investigation.

Indian police in Vadodara have clamped down on an illicit foreign exchange (FX) operation, arresting two employees of a Mumbai-based company after they failed to provide the proper authorization to manage their company, according to a recent report from the Times of India.

The firm in question was XDirect, an FX provider based in Mumbai – subsequently its branch manager Prathamesh Pandya and an additional employee Gunjan Patil were arrested having failed to garner government approval for its operations.

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XDirect is registered in Mauritius, while the Indian office is located in Vadodara, operating in the Manubhai Towers in Sayajigunj. No license on operating in the city had been procured following an investigation and inquiry – XDirect had initially begun its operations in the city nearly one year ago.

According to Mumbai Police Commissioner E Radhakrishana, in a recent statement on the investigation: “We had received information that a company was facilitating trading of foreign exchange in the city. We raided the office and found that XDirect doesn’t have license or permission from the government to operate and allow foreign exchange trading. They are also not registered with Securities and Exchange Board of India (SEBI). We will now visit their Mumbai office for further investigation.”

“The customers were asked to deposit a minimum of $515 (Rs35,000) and given access to MT4 software that is specially designed or trading in foreign exchange. They were allowed to trade as per the amount they deposited. The higher the amount, the bigger the limit for trading,” noted the city’s Police Inspector, Rahul Patel.

Unfortunately for clients, the money deposited by the customers was siphoned into a bank account in Mumbai despite the promise of quick earnings over short periods of time. Consequently, city police have levied an offense against the firm under the mantle of the Securities Exchange Act. Police and investigating officials have seized laptops, one computer, two mobile phones, and a voice recorder from the company premises to ascertain how extensive the operations have been.

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