Ponzi scheme: Court orders sale of assets worth Rs 4,000 cr of fraud company

Feb 13, 2017, 11:30 IST | mid-day online correspondent

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In a landmark judgment that could aid 20 lakh victims of a Ponzi scheme, a special Maharashtra Protection of Interest of Depositor (MPID) Act court has ordered the sale of Rs 4,000 crore worth assets of Sai Prasad group of companies. The latter duped investors with promises of high returns. According to cops, if things fall in order, money could be returned to investors by the end of the year.

According to a report in The Times of India, the properties, attached by the Economic Offences Wing (EOW) of Mumbai police, are across eight cities, including Gwalior, Indore, Bhopal, New Delhi, Jhansi, Pune, Goa. Apart from properties, there are 40 high-end cars, like BMW, Audi Q7 and Prado, and also over Rs 200 crore in 300 bank accounts. Cops are said to have seized a channel run by the main accused, Balasaheb Bhapkar.

The report added that the scam came out in the open in 2015, when the Securities and Exchange Board of India (SEBI) filed a complaint, claiming that Bhapkar's companies collected investments without its permission. The EOW registered a case of forgery, cheating, breach of trust against the company and under the MPID Act. The report claimed cops as saying that the company enticed investors by promising 13.5% interest or 18,000 per month for six years on an investment of Rs 1 lakh, apart from principal on maturity.

"In the initial years, the accused paid high returns to attract more investors," Dhananjay Kamlakar, who supervised the probe, told the paper. Cops nabbed six people in connection with the scam -- Bhapkar, his son Shashank Bhapkar, wife Vandana Bhapkar, director of the company Suresh Srivastav and vice president Sanjay Roy.

Police filed two charge sheets and also took the help of digital forensic auditing to establish the fraud. The accused allegedly invested Rs 100 crore in mutual funds. "It's a big sigh of relief to the investors,” Investigating officer Ashok Khedkar told the paper following the court’s decision.

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