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Investors lose crores in bid to get rich quick

This article was posted on Jun 14, 2009 and is filed under Market News

NEW DELHI: At a time when companies are finding it hard to raise capital to fund their projects due to the global slowdown, thugs in India have successfully steered clear of the recessionary spiral. Beating global meltdown fears, they have cashed in on the ignorance of gullible investors, duping them of crores of rupees.

And with two such cases coming to light recently, an alarmed Delhi Police is planning to launch an advertising campaign urging people to be cautious against alleged fraudsters like Subhash Aggarwal and Ashok Jadeja. The latest case involves owners of BK Jewellers — Rajesh and Chetan Mallik — who are being alleged to have duped more than 300 investors by assuring them handsome returns.

Similarly, Aggarwal, who has been arrested, allegedly lured people into investing Rs 10,000, promising them Rs 1,000 interest every month. In the same manner, self-claimed godman Ashok Jadeja in Gujarat also won the trust of a denotified tribe over a period of time and assured its members of tripling their investment. In all the cases, the alleged fraudsters won the confidence of the people they targeted through word-of-mouth publicity and by initially living up to their promise. While Jadeja allegedly duped people of Rs 1700 crore across 11 states, Subhash, who started three years ago, allegedly made away with several crores, operating from his Aman Vihar residence. Both of them targeted people from the low-income group.

Joint commissioner of police (crime and rlys) Amulya Patnaik said: ‘‘ If any advertisement , e-mails , any person is offering returns which look very attractive, we appeal to investors to consider such offers with caution. We will issue a list of dos and don’ts through a series of advertisements.’’

Explaining Jadeja’s modus operandi, a senior officer of the Economic Offences Wing (EOW) said: ‘‘ Jadeja targeted his own tribe. He invoked religious sentiments to milk his tribesmen who have traditionally been into the liquor trade. The tribe is very secretive and Jadeja knew that no one from outside the community will come to know of his designs.’’

He was also aware that his tribesmen were financially illiterate and would never invest in mutual funds or any other financial instrument. ‘‘He had a free run for almost six months since January. His publicity was done through word of mouth and his tribesmen approached him from all corners of the country. His aunt, Manbai, advised Jadeja to inject a religious aspect into the scheme. She spread the word that Sikotar Mata had blessed Jadeja,’’ said the officer.

Aggarwal, on the other hand, used the old trick of quick and fat returns. To win the trust of investors, he initially did keep his word. ‘‘Later he collected money from investors and gave them cheques. But these cheques bounced and Aggarwal after two to three assurances disappeared.’’

Investigators say that such complaints are very common. These people will always target a community or a region and would set up their base secretly. ‘‘Any person, coming out with unrealistically attractive schemes, knows his exit time and what it takes to create a base. In Jadeja’s case, Ahmedabad Police has found that he started the schemes in January. His scheme was more like multi-level marketing in which investors also become agents and spread the word,’’ said another police officer.

Such scams are not new. ‘‘ Delhi Police recently registered cases against Kanakdhara MLM Company for allegedly defrauding investors by drawing them into multilevel marketing. They promised a return of Rs 26 lakh on an investment of Rs 13,000,’’ said an officer.

Kanakdhara was started two years ago from west Delhi. Soon, the accused set up their offices in Mumbai and other parts of India and allegedly
duped investors of Rs 10 crore. The Mumbai Police arrested the father-son duo of Bhupendra Singh Bakshi (54) and Gurkaran Singh Bakshi (24) in February this year. The police claimed the duo amassed wealth worth several crores, include several acres of land in Rajasthan. The Delhi Police also seized SUVs during the initial days.

No quick returns


B K Jewellers allegedly promised Rs 26 lakh in 5 years to people on an investment of Rs 13,000. The store is owned by Bal Krishnan Malik. His two sons, Rajesh Malik and Chetan Malik, allegedly cheated more than 300 persons.

The first complaint against the store was received in April. The complaint was transferred to EOW that registered a case of cheating and conspiracy against the owners.

On Friday, angry investors pelted stones at the Pitampura and Tilak Nagar showrooms of BK Jewellers and shouted slogans.

STATUS: 2 cases registered against the accused, who are allegedly absconding.


Its director Subhash Aggarwal is accused of siphoning several crores from small investors. He assured double returns within three months of investment.

More than 2000 investors allegedly defrauded.

On Sunday, locals in Aman Vihar ransacked his house.

STATUS: Case registered on June 8. Aggarwal and his wife arrested on Saturday.


Duped investors of crores across 11 states and Delhi by promising them triple returns.

Jadeja’s popularity soared after he actually returned triple the amount invested by some people in order to gain their confidence. He attributed this to his divine powers.

His alleged racket was busted in Ahmedabad when he was arrested on May 30 with his wife. He had set up several counters in Ahmedabad.

STATUS: A Delhi Police team is in Ahmedabad questioning Jadeja and registered a case at EOW. The cops had received more than 500 complaints against him.


Father-son duo of Bhupendra Singh Bakshi (54) and Gurkaransingh (24) offered investors the chance to earn Rs 26 lakh in a year if they deposited Rs 13,920 in monthly instalments in Bihar, Punjab, Assam, TN and Delhi.

The money involved was pegged at Rs 100 cr.

Caught by Mumbai Police in February this year, had cases against them in Delhi too.

STATUS: The two were granted interim relief by the court and have promised to return the money of the investors.


CA Devender Kumar Aggarwal allegedly duped over 5,000 investors of Rs 40 cr by promising them houses in Mohali , Mumbai, Dehradun and Patna.

Though he charged Rs 50,000 to Rs 7 lakh from investors, Aggarwal never had the land nor any infrastructure.

Operated from a swank office in Barakhamba Road, placed ads in English dailies and got a Bollywood actress to endorse ‘housing projects’.

STATUS: Still behind bars. Two more associates of Aggarwal were arrested. His bail was recently rejected by the court and properties have been attched on the orders of Delhi High Court.


JVG director was arrested by Delhi Police on August 17, 2005 for allegedy duping investors. Booked by cops for financial irregularities.

The group had floated many companies under the flagship of JVG. It had collected money from public promising them double and triple returns in a short span.

STATUS: The case is pending trial in the court.

source: Economictimes

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