Mutual Funds
Jabalpur-based mutual fund distributor dupes investors

The distributor collected cash and cheques worth Rs2 crore for investing in mutual funds from numerous people in Jabalpur. The Association of Mutual Funds in India (AMFI) has suspended the ARN number of the swindler

Jabalpur-based 'Champion Advisory Services', an AMFI-registered mutual fund distribution agency, has swindled investors by collecting cash and cheques to the tune of Rs2 crore. The AMFI registration number (ARN) registered under the name of Chandan Panjwani has now been suspended by AMFI.

AMFI received a letter from SBI Mutual Fund on 19 April 2010 asking details about the ARN holder. On 20 April 2010, AMFI wrote a letter to Mr Panjwani seeking his reply. Repeated emails sent by AMFI to Mr Panjwani did not elicit a response. Subsequently, AMFI suspended his ARN number on 19 May 2010.

"He collected cheques from investors and invested in his own name and later redeemed the investments. We have sent letters to the investors also regarding this. We gave him a time of 10 to 15 days to respond. We did not receive a reply so we have suspended the ARN under fraudulent case," said an AMFI official.

The ARN number 53107 has been currently put under suspension by AMFI. (See here http://www.amfiindia.com/ArnSearch_Frm_Po.aspx).

Distributors whom Moneylife spoke to said that many investors have lodged a police complaint in the Jabalpur Police Station against Mr Panjwani. The police are still on the lookout for him.

Mr Panjwani sent this statement to an email query sent by us: "Thank you for your mail. Will reply as soon as I get back."Ever since this fraud came to light, the investor sentiment is depressed in Jabalpur as people are refraining from investing. According to the AMFI website, there are around 172 ARN registered members in Jabalpur currently. 

"People asked him for account statements but he used to keep telling them that they will receive it after some time. Investors have not got their money yet. He fled with the money. We are facing problems now to convince people to invest in mutual funds. He collected cash from people saying that he is new to the business and requires money," said a Jabalpur-based certified financial planner on the condition of anonymity. 

Mr Panjwani collected cheques and cash from various people by assuring them good returns. He allegedly ran a 'lottery system'. 

Jabalpur-based distributors who spoke to Moneylife say that Mr Panjwani is suspected to be in Mumbai after absconding from Jabalpur. He changed six jobs in a matter of one year in various leading mutual fund houses and insurance firms to get a foothold in the industry. Sources indicate that he employed people who were not qualified to sell mutual funds by claiming to offer them hefty commissions. The agents who were working under him have not received their commissions yet.

AMFI's chief executive HN Sinor and chairman AP Kurian were not immediately available for comments. An email query sent to KN Vaidyanathan, executive director, Securities and Exchange Board of India (SEBI) remained unanswered till the time of writing this article

User

COMMENTS

shailesh

6 years ago

he fled with 3 lakhs from me too

shailesh

6 years ago

even I have been cheated for abt 3 lakhs
some one do advise if chandan is found
thanx

U KNOW

6 years ago

well, there are many mutual fund branches carry fake expenses of branch to pass on to direct investors. sebi requires to provide level playing field to ifa , nd, banking distribution, relationship or sales manager of amc. because if milk is not good then you should not hit to one cow , it should be accross cows need to be under scaner. so quality justified. There are many offrole persons in amc are doing work without amfi passed. actually mutual fund branch payment system should be centrally processed and disclosed to investors. there are many issues but we want wound to taken care not spread more which hurts to everyone.

Dillip kumar swain

6 years ago

mr jayesh,nothing is negative in this world.without -ve u cann't get power.so positive is big zero.if u say or publish a fact peoples say negative.if u will say fiction peoples will say possitive. because -ve always difficult to digest & +ve always easy to accept.

Jayesh Doshi

6 years ago

Alredy mutual fund business is down since long 2 years and there is no commission income and client doesnt pay any advisory fee . suffering is small agent.because you give publicity to one single case all other small agent people see with doubt.stop negative news of agent.

Ashok Khaitan

6 years ago

Sebi should punish such agent but not the whole agent freaternity by removing entry load.why sebi silent on such serious issues

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