Citizens' Issues
Kerala gets tough with money swindlers and MLM companies

Kerala, said to be the country’s most literate state, is flooded with numerous ‘get-rich-quick’ or ‘earn-huge-return’ schemes offered by money swindlers. While the state director general of police has admitted noticing frauds amounting to over Rs1,000 crore, the worrying factor is that even a few policemen have been found to be involved in these MLM schemes

Following the hue and cry from a number of investors, the Kerala police has started investigations into several multi-level marketing (MLM) companies, two prominent names among these being Tycoon Empire International Ltd and Bizarre group of companies, and has arrested some of the promoters. Many of these cases have inter-state ramifications and have been handed over to the Crime Branch in Kerala.

Media reports have quoted Jacob Punnose, director general of police (DGP), Kerala, as saying that these investigations would be completed within five to six months. Chennai-based Tycoon Empire International had collected Rs370 crore from 50,000 investors, while Bizarre group collected Rs55 crore from depositors. Besides these two names, one other MLM company cheated people of around Rs300 crore. It operated 14 accounts in a private bank, using false names and addresses, and the Kerala police will report this to the Reserve Bank of India (RBI), he said.

Earlier this month, the Kerala police arrested Abdul Arshad, managing director of Kochi-based Bizarre group, which has allegedly duped about 1.65 lakh people in Kerala alone. According to reports, Bizarre (which is created from the initial letters of Bold, Intelligent, Zealous, Ambitious, Responsible, Rich and Efficient) collected about Rs55 crore from one lakh investors through a money circulation scheme, and over Rs53 crore from 65,000 people as investment in the company's super market chain. Sulthan Bathery police has so far arrested 15 people associated with Bizzare, including its executive director, PT Kunjumuhammed, and seven business promoters.

Last week, police also registered cases against Bizarre and Tycoon Empire International. They were to find that one of their colleagues, a sub-inspector, was acting as chief executive of the Bizarre group. Police are now searching for KT Gopinath, the sub-inspector from Thrissure Armed Reserve Force who is absconding.

Bizarre would collect Rs14,250-Rs5,500 as membership charges and Rs8,750 for 8,000 shares in the company's super market. It promised to give discount cards worth Rs10,000 for buying goods from its stores. Bizzare officials created an image that the company was doing good business, by claiming that it aimed to enter the real estate and hospitals segments, and that it even planned to list on the Bombay Stock Exchange (BSE). However, the Bizarre management could not keep its promises and investors began to register complaints against it, which led to the arrest of top officials.

According to a blogger, Kerala is flooded with numerous MLM schemes that are duping gullible people across the state. The netizen says, "The interesting fact is that most of these (MLM) companies are headquartered outside Kerala, but the number of agents in those areas is almost nil. Obviously, Kerala is becoming the easy place to trap people in these scams."

Take the example of Tycoon Empire International. The company's owners are from Chennai, but it has promoters from Kerala. According to media reports, the Kozhikode police has intensified investigations into alleged money swindling to the tune of Rs370 crore by Tycoon. Police said the company had collected money under the pretext of products, and that its claims to be an ISO certified company are false.

"The company, in its latest bid to regain the faith of investors, claimed to have ISO certification, but it turned out to be false. The Geneva-based organisation has denied issuing ISO certificate to Tycoon," PP Sadanandan, deputy superintendent of police, was quoted as saying.

Tycoon offered Rs10,000 per month, besides a commission for enrolling new members, to anyone who could invest Rs1 lakh. According to media reports, most of the people duped by Tycoon are from Payyoli and Vadakara regions and Palakkad and Thrissure districts of Kerala. A majority of those duped are police personnel, government employees and teachers.

In other case, police arrested three officials of Verizon Builders, another money circulating company. According to police, they were running an MLM scheme in the name of Verizon Builders and Developers Ltd and Encode Financial Services Pvt Ltd for the past three years. They would collect Rs6,000, including Rs5,000 as membership fee and Rs1000 as share in the business, under the pretext of real estate investment. In addition, the members were promised Rs1,000 for every pair of new joiners they brought with them. Besides real estate investment, Verizon also offered products like insurance and ULIPs.

The MLM companies not only targeted residents from Kerala, but also trapped people from overseas, especially people employed in Gulf countries. In the case of Apple A Day Properties, also an MLM company, after numerous complaints, Kerala chief minister Oommen Chandy conducted a video-conference with victims from Gulf countries. The company has cheated people in the state to the tune of over Rs100 crore, under the pretext of real estate projects and buying flats. Last week, Apple A Day Properties' promoters, Saju Kadavilan and Rajiv Kumar Cheruvara surrendered, and they are in police custody till 30 June 2011.

Other companies who have cheated gullible people in Kerala include names like Nano Excel, UniPay2u, RMP, Visarev. The case of Nano Excel is very interesting. While the company has allegedly looted Keralites of over Rs100 crore, the company has itself complained of cheating by one of its directors. On 16 April 2011, Nano Excel issued a notice informing its distributors to stay away from the director, saying "This is to inform that Patrick Thomas who was director in the company is terminated due to mis-appropriation of funds and management administration. Those distributors still in communication with him, personally or officially, do so at their own risk. We now have our new administration team in our headquarters New Delhi, streamlining all defaults of Patrick Thomas executed so far, and our new administration will be a promising team to service you better from now ,sorry for the inconvenience."

The Kerala police has also warned hotels, restaurants and convention centres across the state, not to allow money-chain companies to hold any meetings on their premises.

Moneylife has consistently warned people about MLM scams, and yet finds the 'get-rich-quick' frauds spreading across the spectrum, from millionaires to the penniless and from the uneducated to the highly qualified. The Kerala example underlines the desperate need to spread financial literacy across the country.

User

COMMENTS

SAYED

5 years ago

GOOD NEWS TO ALL SHARE HOLDERS OF BIZARRE GLOBAL MARKETING....

GOOD NEWS TO ALL SHARE HOLDERS OF BIZARRE GLOBAL MARKETING....

GOOD NEWS TO ALL SHARE HOLDERS OF BIZARRE GLOBAL MARKETING....

EVERY THING HAS BEEN CLEARED, ANYBODY WHO WANT TO SUBMIT THEIR SHARES AND TAKE THEIR MONEY BACK,

VERY SOON OFFICE WILL BE OPENED, WORK IS UNDER PROCESS...

LEADERS GET READY TO WORK IN FULL WINGS, THERE WILL BE NO HURDLE , JUST PLAN IN BIG WAY AND START NETWORKING .

GET READY LEADERS.................NOBODY WILL LOST MONEY IN BIZARRE....

REPLY

Aneesh

In Reply to SAYED 5 years ago

when it happens???

I didn't get share certificates yet please advise me what should i do

my cont no: 00971553047123

Samit Misra

5 years ago

first search the Unipay2u frauds... Too Big scam even in India...

joseph

5 years ago

hi

raza gundhi

5 years ago

like this few more companies still running in karnataka, cheating peoples money...few are vegazeal.com, enliteinfra.com, (which was ceized by ccb, bangalore but still the MD of this company is again started another company in the name of goldenlegend.biz), giridhariindia.com, hifindia.com and many more companies . pl take necessary action on them...to save public..

atik peerzada

5 years ago

i want to know how to get back principal amount from tycoons empire international ltd.

Sreedhar

5 years ago

Ponzi Schemes – Frequently Asked Questions

Who is Bernie Madoff?

What is a Ponzi scheme?

Why do Ponzi schemes collapse?

How did Ponzi schemes get their name?

What steps can I take to avoid Ponzi schemes and other investment frauds?

http://www.sec.gov/answers/ponzi.htm

Kishore N

5 years ago

MLM - PONZI FRAUD

Tycoon empire directors Kamalakannn & sadashivam arrested by Kerala Police in Chennai

JOHN

5 years ago

DIRECT SELLING GUIDELINES OF KERALA GOVERNMENT SAID TO BE ENACTED ON 12.09.2011 !!!

Amway advertisement says they are law abiding corporate citizen !

They say they have complied with the Direct Selling guidelines enacted by the Government of Kerala!

What are the guidelines?

Why the Government of Kerala conceal these guidelines from the general public?

Kishore N

5 years ago

NANO EXCEL MLM FRAUD

ACTION COUNCIL WEBSITE

http://www.nanoexcelactioncouncil.net/

Kishore N

5 years ago

MLM Fraud ---- DXN & NANO EXCEL

MADHYAMAM NEWS PAPER EXPOSES DXN - MADDINENI NEXUS and
MALAYSIAN MUSHROOM (Ganoderma lucidum) Fraud

Maddineni knew that people of Kerala would easily fall prey to cheats. That is why he introduced his Nano Excel Fraud to Kerala. Some years ago he defrauded them in the name of "Malaysian Mushroom". These mushrooms are available in Kerala itself especially in Wayanad district. He marketed products based on this mushroom as “magic medicine” in Kerala some years ago. This Mushroom is known as "marakkoon" (Ganoderma lucidum) in Kerala.

Maddineni WAS ONCE THE REGIONAL MANAGER OF DXN.
All DXN offices (http://www.dxn-india.com/) in Kerala are now closed by the Police.

Read more:
http://www.madhyamam.com/news/116036/110...

Joji

5 years ago

Are there any "genuine" Money chain companies?

The Kerala government recently set up a high-level committee to examine the complaint that "genuine businesses" were being affected by the drive against money-chain companies. Their report is awaited.

Is it a ploy to save AMWAY?

Many people believe that it is only aimed at helping out AMWAY.

Kris

5 years ago

DIRECT MARKETING FRAUD - NANO EXCEL

Doctor arrested for MLM fraud

The times of India:-

HYDERABAD: Task Force sleuths nabbed managing director of an international multi-level marketing (MLM) firm, who duped over two lakh people to the tune of Rs 347 crore, from his flat in Kondapur on Tuesday


http://timesofindia.indiatimes.com/city/...

Kishore N

5 years ago

NANO EXCEL (MLM) FRAUD - UPDATE

CRIME BRANCH ISSUES LOOKOUT NOTICE FOR HARISH MADDINENI

(Mathrubhumi News Paper dated 27.08.2011)

The Police have issued lookout notice for Nano Excel Managing Director Mr. Harish Maddineni at various airports.

Kris

5 years ago

Dear Br. Siju Stephen,

Please enlighten us about the "true MLM companies" operating in India. Kindly give us the names and schemes of such "true" companies.

Regards,

Kris
Federation of "Anti-social" workers !

REPLY

Elangovan

In Reply to Kris 5 years ago

Hi Kris, You can get details about True MLM Companies @ http://indian-desk.blogspot.com/2011/08/...

Kris

In Reply to Kris 5 years ago

Dear Br. Siju Stephen,

Where are you? I am eagerly awaiting your reply. Kindly reply.

regards,

Kris

Sajjan

In Reply to Kris 5 years ago

Kris,

These Sijus, Clements are all AMWAY yes-men. They may be thinking that they can fool Anti- MLM activists also.

Whenever tough questions are asked, MLM cheats would leave the place.

sijustephen

5 years ago


First of all we as Indian citizen must get a clarification from our authorities reguarding MLM and MONEY CHAIN, but I am sure you will not get it from them, because they have not yet found the relevance and real scope of MLM in India till now but in reality its high time to realize, regulate and legalize the MLM Industry.
The MLM companies operating in India is said to be following the regulations set internationally. But to tell you sincerly you may not find much companies in India operating LEGALLY AND TRULY as in other countries.


"MLM is a scientific and professional approach of marketing of PRODUCTS/SERVICES done by a MANUFACTERER to the end CUSTOMER
excluding the service of TRADITIONAL INTERMEDIARIES and ADVERTISEMENT and providing the CUSTOMER a chance to regain the amount spent on the product by promoting it VIA WORD OF MOUTH ADVERTISEMENT through a scientific BUSINESS PLAN.

Dear if any one which is mentioned in capital letters is missing then please be clear its not a TRUE MLM Company.

THERE ARE VERY FEW MLM COMPANIES IN INDIA PLAYING THE GAME BUT MOSTLY NOT FROM INDIA.

There are some companies from India also but they too are undergoing the tidal wave against the MONEY CHAIN scam and they have to emerge their TRUTH through court.

I too am waiting to see the reality after the cleaning process that is happening since 2 months by the Kerala Police.

Lets hope for the best.

Any way TRUTH will raise back with double effect and MLM will win the heart of India in another 20 years.

REPLY

Kris

In Reply to sijustephen 5 years ago

Revered Sir,

since you are a professional MLM social worker, I would like to know from you the details of true MLM companies you have been propagating for the "upliftment" of the downtrodden.

Anna Kerala

In Reply to sijustephen 5 years ago

Pyramid schemes are illegal. They are illegal because they are exploitative and dishonest. They exploit the most vulnerable of people: the desperate, the out-of-work, the ignorant. Those who start and practice such fraud, should, and increasingly are, being punished for their crimes.

But add a product for cover, and call it an MLM, and people are willing to swallow its legality. Is this true? Really? Who says so?

It is a fact that a few large MLMs have survived against the best efforts of law enforcement officials to shut them down, spending millions of dollars to protect, lobby, and insulate themselves. But the same could be said for any organized crime. It is difficult to stop once it becomes so large.

And MLMs look so legitimate to the public, so decent. So many nice people are involved. Surely, it can't be illegal! The people lower down may even defend the very organization that is robbing them, hoping that they might get their chance to make "the big money" later.

But if it looks like a duck, walks like a duck, and quacks like a duck, it probably is a duck. Unless it is an MLM, and then it is NOT a pyramid.

Talk to a mobster, don or bhai or gangster, and he will tell you that he is "merely misunderstood in his benevolent intentions." "We are just trying to 'build our business.'" "It's all a conspiracy to make us look bad." "The Govt, neta log are out to get us because they are jealous or afraid of our new way of life." "Why, look at all the good we do!" "We are looking more legitimate every day." "Here's a statement from a famous DA that the Gang is really a good organization and no harm ever comes from it." "We've even got a minister to endorse us now!"

A short rally: Friday Closing Report

A short-term bounce, subject to dips

The market extended its gains today as the International EnergyAgency's (IEA) decision to release substantial crude stocks eased worries about higher inflation for the time being.

With the retreat in global oil prices overnight, following the IEA's move to release two million barrels a day for 30 days, to make up for supplies choked off by an armed rebellion in Libya, the domestic market opened higher. The Nifty opened 23 points up at 5,343 and the Sensex resumed trade at 17,805, a rise of 78 points over its previous close. The opening figures on both the benchmarks were their intra-day lows today. PSU, IT, banking, metals and auto stocks supported early gains.

Extending yesterday's gains, the benchmarks regained their psychological levels of 5,400 and 18,000 on the Nifty and Sensex respectively after a gap of six days, and continued their journey northward. The market rallied after the oil minister clarified that there was no specific proposal to hike fuel prices.

Gains in three key European indices, following the approval by the European Union and the IMF of Greece's austerity initiatives, also supported the gains in the post-noon session. The market rose to its intra-day high in the closing minutes of trade, as the Nifty touched 5,478 and the Sensex scaled 18,269.

The indices ended marginally off those levels, with the Nifty settling 151 points higher at 5,471 and the Sensex soaring 513 points to close at 18,241. The Nifty closing figures is an eight-day closing high. Yesterday, we had mentioned that the Nifty has to go beyond 5,355 to make the bounce meaningful. The Nifty is up for a small rally up to 5,556.

The advance-decline ratio on the National Stock Exchange was a splendid 1312:371.

Among the broader indices, the BSE Mid-cap index gained 2.26% and the BSE Small-cap index rose 1.80%.

Barring the BSE Consumer Durables index (down 2.24%), all other sectoral gauges settled higher. The top gainers were BSE Realty (up 3.76%), BSE Metal (up 3.40%), BSE IT (up 3.37%), BSE Capital Goods (up 3.32%) and BSE Bankex (up 3.25%).

The top Sensex gainers were Hero Honda (up 6.07%), State Bank of India (up 5.95%), Jaiprakash Associates (up 4.55%), HDFC (up 4.46%) and Larsen & Toubro (up 4.25%). Reliance Infrastructure (down 0.84%) and Reliance Industries (down 0.03%) were the only losers on the index.

The major gainers on the Nifty were Sesa Goa (up 6.10%), SBI (up 5.91%), Hero Honda (up 5.71%), Ranbaxy (up 5.15%) and HDFC (up 4.65%). The laggards on the index were Reliance Infra (down 0.91%) and RIL (down 0.23%).

Markets in Asia, with the exception of the Taiwan Weighted, settled higher on the last trading day of the week, as the IEA's move was seen as a relief for the region's economies which are struggling with spiralling inflation. Easing of debt-related tensions in Greece also supported the gains.

The Shanghai Composite jumped 2.16%, the Hang Seng surged 1.90%, the Jakarta Composite gained 0.65% the KLSE Composite added 0.09%, the Nikkei 225 climbed 0.85%, the Straits Times advanced 0.73% and the Seoul Composite finished 1.70% higher. Bucking the trend, the Taiwan Weighted was down 0.40%.

Back home, institutional investors-foreign and domestic-were net buyers in the equities on Thursday. While foreign institutional investors pumped in funds amounting to Rs229.21 crore, domestic institutional investors put in funds worth Rs241.95 crore.

User

COMMENTS

Shibaji Dash

5 years ago

the rally-bounce of the dead cat ?

Post of Ahmedabad insurance ombudsman lying vacant since past nine months

Grievance redressal machinery has been disrupted; aggrieved parties have been considerably inconvenienced

The Consumer Education & Research Centre (CERC), a leading non-profit, consumer rights organisation, has asked the insurance regulator to fill up the nine-month old vacancy for an insurance ombudsman at Ahmedabad.

CERC chairman, Dr VG Patel, told Moneylife, "The institution of Insurance Ombudsman had been extremely useful in providing remedies to aggrieved insuring public. The Ombudsman at Ahmedabad was expeditious in settling matters when there were inordinate delays in courts, including consumer courts. The insuring public in Gujarat has taken great benefit through the Ahmedabad Ombudsman. We are requesting the IRDA chairman to fill the vacancy urgently."

The Insurance Ombudsman is an independent office that provides speedy and cost-effective resolution of customers' grievances if the insurance grievance cell has not been able to provide satisfactory response to complaints.

The Insurance Regulatory and Development Authority (IRDA) has left the post of the Ahmedabad insurance ombudsman vacant since the past nine months. This has certainly hurt the insurance grievance redressal system in the area of Gujarat, the union territory of Dadra & Nagar Haveli, Daman and Diu. Once a case has been submitted to the ombudsman's office, simultaneous recourse to the consumer court is not possible as per the law. Aggrieved customers are stuck with no alternative.

According to Gaurang Divetia, an insurance expert in Ahmedabad, "There are about 600 to 700 claim grievances pending with the Ombudsman's office. It solves 50 to 60 cases every month on an average. The waiting period for a policyholder after filing the complaint with the Ombudsman is three to six months (assuming that the Ombudsman is operating)."

Moneylife emailed IRDA to find out about the delay in appointing a new ombudsman, but has not received a reply till the time of writing the article.

A call to the Ahmedabad Insurance Ombudsman's office confirmed that no cases are being resolved and a long backlog of cases is building up. Obviously, when consumers file a complaint, they are not given a timeframe in which they can hope to get a hearing or redressal.

According to the office of the governing body of the insurance council, "The selection has been made and a circular resolution sent to insurance companies. Once it is approved by them, an appointment letter will be issued. It may take 15 days to one month."  

When asked about the reason for the nine-month backlog and the delay in the appointment, a council official said, "Ahmedabad is not a big centre and hence there should not be a problem in clearing the backlog. There is a committee headed by the IRDA chairman to select the ombudsman. We had written to them a number of times. The insurance secretary is also on the committee whose availability may be an issue. This is not an unusual delay."

There are 12 insurance ombudsman offices across the country. For more details on the insurance ombudsman please visit http://www.irdaindia.org/ombudsmen/ombudsmenlist_new.htm. The web page has obviously not been updated as Shri Amitabh is no longer insurance ombudsman in Ahmedabad. We hope that the process to select the Ahmedabad ombudsman will be expedited in the interest of quick resolution of customer grievances.

User

COMMENTS

NAGESH KINI

5 years ago

I'm not surprised. An application for a simple issue filed at Mumbai earlier this year has not come up as the Ombudsman is travelling to Nagpur and Goa.

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