SEBI's Findings on Front-running: The Role of Angadias Explained

Inside SEBI’s Front-Running Probe: The Shadow Role of Angadias in Moving Illicit Profits

The angadia system has long been a part of India's informal financial culture—relied on by jewellers, traders, and small businesses to move cash securely, swiftly, and quietly across cities. But as SEBI’s recent investigation into a massive front-running racket has shown, that same trust-based network was also being exploited to funnel illicit gains, far from the watchful eyes of regulators or banks.

In an interim order issued on January 2, 2025, SEBI revealed how these age-old couriers became a vital cog in the machinery of profit distribution linked to the Ketan Parekh–Rohit Salgaocar front-running operation. This wasn’t just market manipulation—it was a meticulously executed, off-the-books cash distribution plan built on secrecy, coordination, and human trust.

The Angadia Network: Cash, Code, and Confidence

If you're unfamiliar with how angadias operate, think of them as traditional couriers—often family-run outfits—who specialise in physically transporting high-value goods or large sums of money, often between cities like Mumbai, Surat, Ahmedabad, and Delhi.

But in this case, angadias weren’t just moving legal business payments. They were allegedly the preferred vehicle for distributing crores in illicit trading profits, with zero involvement of banks, wire transfers, or digital footprints.

How It Worked: SEBI Reconstructs the Profit Loop

SEBI’s investigators, using call records, WhatsApp messages, and transaction trails, were able to piece together the step-by-step mechanism used to move money via angadias. Here’s how it played out behind the scenes:

1. Payment Request Initiated

Once trading profits had been booked, one associate would request a cash transfer from another. But there was no paper trail or invoice—just an exchange of details and a unique code.

2. The Currency Note as a Marker

To authenticate the courier, the parties used a clever workaround: they would agree on a specific currency note—identified by its serial number. This note served as a kind of handshake in the deal.

3. Courier Dispatched with Identifier

The angadia would be informed of the transaction and, once onsite, present the identified currency note as proof that they were the authorised person.

4. Confirmation via Photo

After collecting or delivering the cash, the angadia or the recipient would take a photo of the agreed-upon note and send it to the counterparty. This image served as the final confirmation—closing the loop.

5. Transaction Completed—Off the Record

No receipts. No ledgers. Just a network of individuals who knew each other, trusted each other, and operated far outside SEBI’s conventional surveillance frameworks.

Real Examples From SEBI’s Order

Two detailed examples from SEBI’s 80+ page order offer rare insight into how the angadia mechanism was deployed to distribute illicit gains.

Sagar and Sumit Sonthalia

In one instance, Sagar, a close associate of Ketan Parekh, requested a cash payout of ₹50 lakh from Sumit Sonthalia. After getting the green light, Sagar passed along details of the angadia, including the serial number of a specific note.

The courier showed up to Sumit’s office with that exact note. After handing over the money, Sumit sent a photograph of the note back to Sagar, confirming that the transaction was completed—no questions asked.

Shyam Saraogi and Sanjay Taparia

In a separate instance, Shyam Rajkumar Saraogi sent an angadia to Sanjay Taparia, passing along a photograph of the note and courier details. Taparia, in turn, forwarded this information to Kau New, another associate further down the chain.

A few days later, Kau New confirmed receipt of ₹20 lakh, complete with a photograph and a handwritten receipt from the angadia service—listing Shyam’s name as the beneficiary. No trace of this money would appear in any bank log or digital ledger.

Why This Matters: Regulatory Implications Are Huge

SEBI’s revelations highlight more than just a clever work-around—they expose a blind spot in India’s financial surveillance. Here’s why it’s deeply concerning:

1. Untraceable Transactions

By sidestepping banks, the perpetrators were able to launder trading profits with near-total impunity. Forensic audit tools, which rely on formal channels, were rendered ineffective.

2. A System Built on Trust, Not Compliance

Angadias don’t operate under the RBI’s oversight. There are no mandatory KYC norms, no audit trails. Their entire model depends on long-standing personal relationships, which makes regulatory intervention incredibly difficult.

3. A Growing Challenge for SEBI and the ED

This case raises a fundamental question for policymakers: how do you regulate a financial system that doesn’t officially exist?

SEBI’s findings indicate the need for greater inter-agency coordination—possibly involving the Enforcement Directorate, the Income Tax Department, and the FIU (Financial Intelligence Unit)—to map, monitor, and eventually regulate these informal conduits.

Final Thoughts: SEBI Pulls the Curtain Back—But the Stage Is Still Set

By documenting the role of angadias in the Ketan Parekh-linked scam, SEBI hasn’t just caught wrongdoers—it has pulled the curtain back on an invisible layer of India’s market ecosystem. One that operates in the shadows, often trusted more than formal systems, but capable of facilitating serious white-collar crime.

The challenge ahead is monumental. Because to truly safeguard markets, watching trades isn’t enough anymore—regulators may now need to watch cash, too.