MLM / Chain Money
MLMs continue to dupe investors under ‘guaranteed returns’ from forex trade

Kerala Police have arrested two persons in connection with a forex racket which has duped over 60 investors of several crores of rupees, while, at the same time, employees in Chennai have escaped

While the rupee has been grabbing headlines of late, what is little known or reported is that a multi-level marketing (MLM) company under the guise of foreign exchange trading, Wismore Trading and Investment Consultancy Pvt Ltd (Wismore Trading), has defrauded more than 60 hapless investors of several crores of rupees, by promising them lavish returns, since 2011. The company’s officials, Antony Devassia and K Jaikuttan, have been arrested by the Kerala police, according to The Asian Age, which reported the news. It is also reported, by Manorama News, that Wismore International India Pvt Ltd (Wismore International) has closed down and the employees escaped upon hearing the news of the arrests. These two episodes clearly show regulation, or lack of it, has once again failed to protect Indian investors and savers, and that smaller companies that fly under the radar are capable of robbing investors and savers of their hard-earned money.

According to the Asian Age, the Kerala police acted when it received two complaints from investors who had collectively lost Rs110 crore investing in Wismore Trading. The company’s modus operandi is similar to that of most MLMs and companies, which give ‘guaranteed’ returns. It supposedly, promised investors lucrative returns, of as much as 10%-15%, in exchange of large investments. It even paid initial investors regularly for at least three months to attract more savers. The money collected was deposited in another firm Wismore Trading FZC operating out of Ajman Free Zone in Dubai on the basis of fluctuations in currency value, reports The Asian Age.

What is more shocking is that the Tamil Nadu police have not taken any action because no official complaint has been filed in the state yet, even though they are aware of what happened. According to Manorama News, it is believed that employees of Wismore International escaped in three cars.

It is also interesting to note that the hoarding at the Wismore International office in Chennai has “Nirmal Bang” written in a larger typeface than Wismore. Moneylife wrote to Nirmal Bang seeking confirmation of whether the broker was indeed connected to Wismore International, in any capacity. We have not received any reply so far.

Apparently, according to Wismore International website, it is a ‘registered’ forex trading company based in the British Virgin Islands (BVI), a well known offshore country where millionaires and crooks stash their money. No legal details could be found though.
According to the Wismore International website, the company has two branches, one in Dubai and one in Chennai. However, according to Times of India, a preliminary police probe has revealed that the Wismore International had operations in various parts of the country under different brand names. Wismore Trading is one such entity that could be related to Wismore International.

A quick glance at Wismore International website  clearly shows that the company doesn’t look genuine. It even describes itself as a consumer-friendly company. For instance, Wismore International’s vision is to “Provide Healthy Products and Services with Life Changing Results” while its mission is to “Provide a Safer Platform for Forex Trading Solutions”. The company goes a step further describing its USP by using positive adjectives: “The USPs of Wismore are Transparency, Trustworthiness, Sincerity, Integrity, Experience, Promptness and Ethical Responsibilities.” Many financially illiterate investors usually fall for rosy descriptions like the ones described above.

It doesn’t stop here. In a similar case, the Peramangalam police arrested noted Kerala industrialist MK Kuruvila of Bangalore. He was arrested following a complaint lodged by Bijeesh, a native of Aamballoor, for swindling money from him, says Indian Express in a report. According to the Peramangalam police, Kuruvila had swindled Rs45 lakh on several occasions by saying that he would return the money after doubling it through foreign exchange trade and commodity trading. However, Kuruvila’s true intention came into lime light when he did not return Bijeesh’s money on time and did not answer his calls.

Kuruvila is accused of duping several people making them deposit money in his company called Pan Asia Brokers and Consultancy Pvt Ltd, a company registered with the ministry of corporate affairs.  The police said that several other cheating cases were also registered against him at various police stations in the state. Sunil, a native of Amballur in Thirssur, had filed a complaint with the Pudukkad police against Kuruvila for cheating him of Rs52.35 lakh in the same manner.

Unfortunately, the state of regulation in India is in a mess. Savers often have to rely on police complaints to take action, especially after they have lost money. This isn’t the first time the police have unilaterally taken action on the basis of complaints. Moneylife had written about how the Andhra Pradesh police took action against unsafe and shady MLMs. The story can be accessed here: MLMs to face scrutiny by FIPB following action by Andhra Police

Reported by: Aditya Govindraj and Anishi Khetan




4 years ago

NIRMAL BANG needs to clarify. SEBI must order probe.

RTI Judgement Series: Information which is more than 20 years old should be provided

Rejecting the PIO's claim for exemption under Section 8(1)(d) & (e) of the RTI Act, the CIC said, since the information was over 20 years old, it should be provided. This is the 126th in a series of important judgements given by former Central Information Commissioner Shailesh Gandhi that can be used or quoted in an RTI application

The Central Information Commission (CIC), while allowing an appeal, directed the Public Information Officer (PIO) of Bank of India to provide information about public provident fund (PPF) records that were over 20 years old. The PIO had claimed exemption under Section 8(1)(d) & (e) of the Right to Information (RTI) Act.


While giving this judgement on 29 July 2009, Shailesh Gandhi, the then Central Information Commissioner said, “The Commission as well as all PIOs have to follow the provisions of the RTI Act and cannot on their own start deciding disclosure of which information would be good for society.”


Kandivali (Mumbai) resident Jignesh V Thakkar, on 4 June 2010, sought details of PPF accounts with the bank relating to the 10 year period between 1 April 1979 and 31 March 1989 from the PIO of Bank of India, under the Right to Information (RTI) Act. Here is the information he sought and the reply given by the PIO...


Details of PPF accounts for all branches under the jurisdiction of the Bank of India which have completed the initial investment period i.e. 15 years (or completed the extended period) for which the maturity amount is not yet claimed or intimation of further extension is not yet received. The details are required for the 10 financial years i.e. from 1 April 1979 till 31 March 1989. The details wanted were:

a. PPF account number

b. PPF account holder's name

c. Complete postal address of the account holder

d. Contact numbers of the account holder

e. Email address of the account holder

f. The date on which the PPF account matured

g. The amount payable to the account holder
h. If such PPF account holder is also holding a savings bank account in the branch then the complete name, address, contact numbers of the person who has signed as introducer for the savings account
i. Details of the steps taken to contact the account holder to inform about the PPF maturity


PIO's reply: The information sought falls under the exemption provided under Section 8(1)(d) & (e) of the Right to Information Act and also it would cause unwarranted invasion of the privacy of the individuals. Thereby the request for information is rejected.


Not satisfied with the PIO’s reply, Thakkar then filed his first appeal. In his order the First Appellate Authority (FAA), while upholding the PIO's decision said, “The information sought is third party individuals and is of commercial confidence in nature. The said information is held by the bank under fiduciary relationship and relates to personal information. Therefore, the said information being exempted under section 8(1)(d), (e) & (j) of the Act cannot be supplied to you (Thakkar).”


Thakkar then approached the CIC with his second appeal. In the appeal, he stated...


1. The First Appellate Authority did not provide the details of the procedure for the second appeal.

2. “The information which is 20 year old can be denied only under sub-clause (a), (c) & (i) of section 8 and no other sub-section. Hence the denial of information under section 8(1)(d) & 8(1)(e) of the RTI Act is not allowed.”

3. Failure to comply with the guidelines issued by the Government of India—Guidelines issued by Government of India, Ministry of Personnel, P.G. and Pensions Department of Personnel and Training dated 25 April 2008 for the officers designate as the first appellate authority under the RTI Act 2005 clearly states that the information can only be denied under clause (a), (c) & (i) of Section 8. Therefore information cannot be denied under section 8(1)(d), 8(1)(e) & 8(1)(j) of the RTI Act.

4. Failure to provide speaking order—from the appellate order—it is evident that the first appellate authority has completely ignored the clear guidelines issued by the Government of India based on observation of CIC.

5. Existence of Public Interest – “It is important to emphasis that as the matter pertains to public money, definitely there exists ‘larger public interest’.”


During the hearing through video conferencing, Mr Gandhi, the then CIC noted that the PIO has denied information about PPF accounts with the bank claiming exemption under Section 8(1)(d) & (e) of the RTI Act. In his appeal, Thakkar, the appellant, argued that since the information was 20 years old, as per the provisions of Section 8(3) of the RTI Act, he should be provided the information.


Section 8(3) of the RTI Act states,

“Subject to the provisions of clauses (a), (c) and (i) of sub-section (1), any information relating to any occurrence, event or matter which has taken place, occurred or happened twenty years before the date on which any request is made under Section 6 shall be provided to any person making a request under that section:”


Mr Gandhi noted that it was clear that the exemptions sought for non-disclosure by the PIO are not covered under clauses (a), (c) & (i) of sub-section (1) of the RTI Act.


The PIO stated that disclosure of such information could lead to some misuse of the information.


Mr Gandhi said, “The Commission as well as all PIOs have to follow the provisions of the RTI Act and cannot on their own start deciding disclosure of which information would be good for society.”


The PIO also stated that PPF Act, 1968, and the Scheme there under this information cannot be disclosed. 


Section 20(2) of the RTI Act clearly states,

“The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Official Secrets Act, 1923, and any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.” 


Mr Gandhi said, as far as disclosing information is concerned the RTI Act supersedes provisions of all earlier Acts.


“The Commission does not accept the plea of the PIO for refusal to give the information under Section 8(1)(d) &(e) of the RTI Act since the information is over 20 years old and the provisions of Section 8(3) of the RTI Act will apply in the instant case,” he said.


While allowing the appeal, the CIC directed the PIO to provide the information sought to the appellant (Thakkar) before 25 September 2011.  




Decision No. CIC/SM/A/2011/001324/SG/14256

Appeal No. CIC/SM/A/2011/001324/SG


Appellant                                            : Jignesh V. Thakkar,

                                                                 Kandivali (E), Mumbai -400101


Respondent                                       : Shivram Naskar

                                                              PIO & Dy. GM

                                                              Mumbai North Zone,

                                                             Bank of India

                                                             Bank of India Building, 2nd Floor,

                                                            Opp. Natraj Market,

                                                            SV Road, Malad (W)

                                                           Mumbai- 400064




4 years ago

Unnecessarily delayed to give an PF number to me.My PF cheque has become invalid date. Hence, I have personaly suffered in monetary level.
Our official said that they have procedures to give new PF number.
Therefore,Through RTI, I demand issue copy of the employees applications (20 yrs before)who were demand for new number.
Now Official reply that the more than 20yrs record cannot be given and also cannot be given the individual records.(which I was not asked Individual record & I asked only any 5 of the PF number applied staff)
Hence whethere their reply is correct.

Where is the rupee headed?

In January 2008 the dollar fetched Rs39.27 and now it is hovering around Rs60, thus losing about 34% of its value. Due to the practically free import policy, relatively free and unrestricted travel abroad, billions of dollars are being utilized, leading to deficits

It is true that Benjamin (Ben) Bernanke, chairman of the US Federal Reserve, caused a worldwide monetary tumble by slowing down the bond buying programme, which in all possibility may come to an end by the close of the year.


This simple indication has resulted in the dollar strengthening against major world currencies.  Since April this year, except for the British pound and the Chinese Renminbi (Yuan, as it is popularly known), a number of currencies such as the Brazilian Real, Rand, Indian Rupee, Mexican and Philippines Pesos, Russian Rouble, Turkish Lira, Indonesian Rupiah, the Malaysian Ringgit, Thai Baht, South Korean Won and the Euro fell by various percentages. The lowest was the Euro at 0.15% while the South African Rand fell by 13.99%.


Each country has its own domestic reasons and relatively poor export performance may have caused this fall apart from the issue of GDP and the rest, but  the very fact that the US may have to slow down the bond buying may have additionally precipitated this fall!


This is an extremely difficult and unpredictable subject to handle and fathom, as so many factors play a role in the process.


As far as the Indian rupee is concerned, first and foremost is the crossing of the Rs60 barrier that had somehow held up for more than two years. And a few days ago, it crossed this threshold.


It may be recalled that in January 2008 the dollar fetched Rs39.27 and now it is hovering around Rs60, thus losing about 34% of its value. Exporters are happy for this windfall gain, but, the importers have to pay so much more to get their goods.


Is this depreciation of the rupee a temporary phenomenon, or is it likely to slide further down to Rs62-Rs65 range?  And, will it stop there and what are the chances for recovery? Very difficult to say and even more difficult to predict!


And what should the government do, what role can the Reserve Bank of India (RBI) play effectively to stop this fall?


The first is the international repercussion due to the worldwide reaction to the Federal Reserve’s move.  On this, none but the US has the control.


Second is the peculiar situation of black market trade that is highly prevalent in the rupee exchange rate due to the ‘hawala’ transactions. As we write this, it has come to light that four trucks carrying money, jewellery, etc from Mumbai to Gujarat were caught with some Rs200 crore worth of these materials, said to be for settlement of ‘hawala’ transactions, and the investigation is still going on. This racket is several decades old and in spite of various attempts, there appears to be no end in sight.


The third important factor is that billions of dollars are remitted back to India every month by the expatriate Indian population working abroad, particularly in the Middle East. No doubt there is substantial transaction of this expatriate wealth that takes the ‘hawala’ route!


Fourth is the huge amount of money that has been stashed away in Switzerland and other countries on which the government has the relevant information, but for reasons known to it, is not making the details pubic. This lot, of course, has escaped the tax net of the government and generally classified as “black money” abroad on which discussions have been going on for years.  It is a separate issue that such large sums of unaccounted, un-taxed money, also known as black money is within the country, running a parallel economy.


Finally, due to the practically free import policy, relatively free and unrestricted travel abroad, billions of dollars are being utilized, leading to deficits. In fact, today, our foreign exchange reserves are now roughly 15% of the GDP, which is one of the lowest in the region.


And, on the top of all these not-too-rosy conditions, general elections are only a few months away.


With all these in the background, what are the steps that can be taken to protect the rupee?  Here are some suggestions for the government:


               a) Consider seriously establishing two rates of exchange for the rupee against the major currencies


               b) instead of allowing the rupee to float, officially devalue the currency and fix a realistic price of exchange. The real value of the rupee may be pegged at about Rs63 to a dollar


                c) this is probably the going rate for ‘hawala’ transactions; such a rate may help to eliminate the ‘hawala’ system altogether


                d) encourage expatriate Indians working (and living permanently abroad) to remit funds through banking channels


                e) such NRI/OCI remittances be given an additional rate of interest benefit, if the FDRs are for three years or more


                f) discourage and restrict items of imports that are easily obtainable from indigenous sources; all such finished goods, if imported, will have to pay a penal rate of import duty over and above existing levels; all items under ‘OGL’ need to be reviewed and curtailed where possible


                g) all imports of essential raw materials, capital goods and maintenance spares, obtained under export incentive replenishment licenses, like the erstwhile schemes, will have a lower exchange rate so as to encourage exports, which will earn higher rupee rates


Unless the government takes serious steps, including the total ban of reckless import of gold, the rupee is heading for a further fall.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)




4 years ago

The writer needs to do a course in Economics. Imagining penalising foreign imports and not expecting a similar reaction on our exports. If you depreciate the rupee further to 63 - havala channels automatically changes rates to beat the rate.


4 years ago

For starters, the author should address the main issue, how to reduce the imports bill for petroleum products and how to increase exports. It is alleged that there are certain forces who do not want that the indigenous potential for oil and natural gas be tapped to its full extent and who want the high dependency on imports to continue.
Gold hoarding is a result and not the cause for shrinking rupee value.

AK Sharma

4 years ago

Well dollar has virtually become a currency for the world to trade anything.

The need of the time is to get rid of US dollar and replace with a currency which is more stable, maybe with new world currency.

US economy is hurting everyone.

"If US sniffs every country in the world economy gets cold"


Mohan Rao

In Reply to AK Sharma 4 years ago

Thats what Saddam Hussien and Gaddaffi tried to do - float an alternate currency backed by Gold, and I guess you know where they are now.

Mohan Rao

In Reply to AK Sharma 4 years ago

Thats what Saddam Hussien and Gaddaffi tried to do and you know hwere they are now.

Shadi Katyal

In Reply to AK Sharma 4 years ago

Sharma ji,
Such writings have no meaning as Dollar is the world currency and if you are keeping in touch with world trade and banking, you have seen the condition of Euro and there was a talk about Yen at one time.
Instead of looking outside and blaming Dollar why not look what we have achieved in decades except religious feud,quota system and non working parliament. Corruption and red tape to stop the industrialization of the nation.Look across the border and see where China is and where we are when in 1990 China was not even on par with India.
We must learn to find faults with others. Are you not aware that USA is the biggest market still.

Anil Girotra

4 years ago

Idea of having a differential exchange rate for imports and exports is good.Also I feel that some encouragement to FDI in manufacturing sector by having single window clearance and land in backward areas should be put in place.For discouraging Oil import we must encourage exploration of oil and give some tax breaks to such companies which get into this or even develop products which are import substitutes.

ashwin bahl

4 years ago

heading southwards, simple !

Sadanand Patwardhan

4 years ago

Pegging the rupee at Rs. 63/ dollar, which is **probably the going rate for ‘hawala’ transactions (such a rate may help to eliminate the ‘hawala’ system altogether)**, is a preposterous suggestion. The calculus of exchange rates may work on fundamentals in the long term, but in the short run by attacks of panic when currency is falling. Forex markets dwarf all other markets by the sheer volume and it is in no institution or nation's power to influence. IF government were to peg rupee at Rs. 63 as the author suggests, then that would become the NEW NORMAL, and hawala rate may go to Rs. 66. Unless India withdraws rupee from Forex markets, something global capital won't allow, there is no way to defend currency through arbitrary measures. No country has managed to do it. Even the former imperial power Britain.


Shadi Katyal

4 years ago

It is interesting to read that the writer has given 2 main reasons> free imports and 2>travel abroad.Both are not true. Why should an Indian travelling abroad should act like a Fakir as we saw during early days of Currency controls? and secondly why should a citizen not enjoy the quality good from abroad.
The main reason such large fluctuations are non exiting of any industry due to lack of any new Labour and Union Laws./
India has lost her luster with red tape and bureaucracy and mandatory taxes.
Why has industry failed to open any markets.
Beside intellectual;s what we got to export.
Why after 6 decades we are still on such closed economy.
O)new wonders if we have a very limited thinking and are not willing to allow industry to flourish with proper union Laws.
I suggest that writer should go abroad and ask for such limitation of investment and hear the lawlessness and no working ethics.
Even Bangladesh has A better industrial policy and look at the garment industry which used to be best of India.
Time to wake up and find the reason which is simple working ethics,discipline and govt off our backs.
Let us breath freely without Babus and unions around and open door policy for investment.
learn from China as time is not far when we might have to send our Gold to England if such morass continue

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