Daijiworld Media Network - Bengaluru
Bengaluru, Sep 26: Another ponzi scheme, where over 2000 investors were cheated, has come to light in Bengaluru.
The Karnataka government has ordered a CID probe to investigate the scam undertaken by the companies Yellow Express Logistics Limited, Yellow Express India Pvt Ltd, Yellow Finance and Earnings Ltd, Login India Finance and Earnings and Laxmi Carzone Pvt Ltd.
Revenue minister R Ashoka told media, that the prime accused Ramit Malhotra, Jojo Thomas and Madi Nair opened the five companies in question. Through these companies, they asked people to invest up to Rs 2.5 lac and offered them a unique business proposition. The trio told investors, that the money invested will be used to buy cabs. The cabs will be registered in the name of the investor and later attached to a cab aggregator. The revenue generated from the cabs that could range from Rs 10,000 to Rs 25,000 per month was promised to the investors.
Meanwhile, the Reserve Bank of India wrote to the state government that the companies were not non-banking financial companies (NBFCs). "Hence, the companies are not authorised to accept deposits or undertake any NBFC activity such as lending, investment etc."
Ashok also adds that the companies were not in the list of registered entities as per Securities Exchange Board of India.
When investigations were conducted, only 63 cars were registered in the name of investors and attached to cab aggregators. However, over 2,000 people have already invested in the company. The investigators estimate that the company has collected up to Rs 60 crore through the ponzi scheme.
Officials also noted that 240 cars were registered in the name of owners and investigations are conducted to find the authenticity of the registration documents.
Also, in case the company owners had to pay the investors the returns promised, then the profit should be a minimum of Rs 3 crores a month. However, here the company earned a monthly income of barely Rs 20 lac, which makes the business model suspicious.