The Securities and Exchange Board of India (SEBI) has clarified that activities of Heera Islamic Business Group, better known as Heera Gold, are in the nature of Ponzi or multilevel marketing (MLM) scheme. However, since these activities are beyond the ambit of SEBI and Reserve Bank of India (RBI), the case has been referred to CID- Economic Offences Wing (EOW), Enforcement Directorate (ED) and Commissioner of Police in Hyderabad, SEBI said.
Replying to an email sent by Moneylife with videos of panicky investors, the market regulator’s Hyderabad office wrote to say, "Upon examination into the matter, it was found that the activities of Heera Group are in the nature of Ponzi Scheme. Further, the nature of activities of Heera Group was also discussed in the meetings of State Level Co-ordination Committees (SLCC) of Andhra Pradesh and Telangana, which are headed by Chief Secretaries of the respective states. It was decided in the meetings of SLCC that the activities of Heera Group appear to be beyond the regulatory ambit of SEBI and RBI and the case would be taken up for investigation by relevant authorities such as CID-EOW, and Serious Frauds Office of India (SFIO). Accordingly, SEBI had already referred the case to CID-EOW, Enforcement Directorate, Commissioner of Police-Hyderabad."
The email further says, “As the matter is presently being handled by Central Crime Station-Hyderabad, SFIO-Telangana, and Enforcement Directorate-Hyderabad”, the regulator has sent the videos forwarded by Moneylife to its Mumbai office to these respective agencies. SEBI has also "marked a copy” to the Reserve Bank of India which is the nodal office for State Level Coordination Committee.
Heera Group claims to be a gold trading company with business all over the world. In the past four years, the lack of any enforcement action by investigation agencies has allowed it to grow rapidly and diversify into diverse business. In the past two years Moneylife has raised the issue of Heera Gold's Ponzi operations with two SEBI Chairman — Mr UK Sinha as well as Mr Ajay Tyagi — because it operated like a vast collective investment scheme. Neither of the two SEBI chairmen bothered to respond. Our communication we said, "We hope SEBI will take note of this and hasten action so that people do not end up losing money. Many women too are being conned into borrowing against property to invest in these companies on the claim that the returns would be significantly higher than the interest they would pay on their loans."
The controversial and shadowy group has specifically targeted the Muslim community with the promise of high returns and constant references to ‘Allah’ to project itself as a devout and god-fearing organisation. The panic among investors over the past weeks is due to delays in making payments and a change in the payout dates. Several media reports and investors say that its founder, Nowhera Shaik floated a political party, which lost badly in the recent Karnataka elections, which has led to its financial difficulties.
Typical of Ponzi operations that are in trouble, she has released a video to allay fears of investors and run down critics and those who are panicking at the payment delays.
Few days ago, several investors from Hyderabad, Mumbai, Pune, Aurangabad from Maharashtra and Karnataka reached Heera Gold's central office at Hyderabad. They wanted to know why there was change in the payout scheme. However, instead of responding to issues raised by investors, the staff at Heera Gold closed office doors from inside.
Agartala, The CBI on Thursday questioned another former Left Front minister in Tripura and his two ex-private secretaries in connection with the Kolkata-based Rose Valley chit fund scam case.
Former Finance, PWD and Health Minister Badal Chowdhury was questioned by two Central Bureau of Investigation (CBI) officials at the MLA Hostel here for about two hours.
On Wednesday, the CBI questioned former Left Front Minister Bijita Nath on the issue.
"The CBI is collecting facts from different states as part of their probe into the Kolkata-based Rose Valley chit fund scam. So they also spoke to Nath and Chowdhury," the former minister's lawyer said on condition of anonymity.
After questioning, Chowdhury told the media: "The officials wanted to know some information from me for the period of 2004 and 2008. I replied accordingly."
The CBI officials refused to talk to the media.
The two former ministers said they would cooperate with the CBI to probe the chit fund related cases as they wanted the accused to be punished and people to get back their deposits.
On Thursday, two former private secretaries of Badal Chowdhury -- Sekhar Datta and Manik Lal Dey -- were questioned at the CBI office here.
The CBI in June 2017 questioned Nath and Communist Party of India-Marxist (CPI-M) central committee member Gautam Das in connection with the Rose Valley chit fund scam.
CPI-M leader Bijan Dhar said: "No CPI-M leader and former Left Front ministers were involved with any chit fund organisations."
The Bharatiya Janata Party (BJP), Congress and the Trinamool Congress (TMC) separately charged the previous Left Front government with promoting illegal chit fund organisations and unauthorised Non-Banking Financial Organisations (NBFCs) in Tripura.
The erstwhile Left Front government in Tripura had enacted a law in 2000 to deal with the illegal NBFCs and chit fund organisations and since 2016 began confiscating all movable and immovable properties of the Rose Valley chit fund organisation in the state.
The chit fund organisation -- Rose Valley -- is now under the scanner of the Enforcement Directorate and the CBI. Its sole proprietor and Chairman Gautam Kundu was arrested in Kolkata in 2015.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
Rahul Dravid, nicknamed The Wall, is a legend for his studied and meticulous approach to the game of cricket—as a player, captain and coach. Prakash Padukone had a similar reputation. Wouldn’t you expect them to show the same approach to their hard-earned savings? So imagine our shock to find that Rahul Dravid was duped of Rs4 crore by a ponzi scheme, peddled to him by a sport journalist, Sutram Suresh, who clearly had his trust. Isn’t that like going to a dance class to learn cricket? Would Mr Dravid or Mr Padukone have made that mistake?
The key to this strange decision is in the quote by a police source reported by various newspapers. It says, the scheme promised a return of 30% to 40% and that made all the difference. Among the other victims was young Saina Nehwal, who had once said that her father handled her finances and invested them in insurance. As it happens, the journalist who conned these sports stars was also an insurance agent.
His company has allegedly scammed 800 people of around Rs300 crore and, on Mr Dravid’s complaint, scamster Raghavendra Srinath, the journalist Suresh, and many others have been arrested. But will the money come back? It rarely does, in ponzi schemes.
Anyone who has attended a Moneylife seminar knows our simple rule of thumb: if someone offers you a fixed-income return that is 3% above that of a bank term deposit, it is a red flag. Gifts and pass-backs from distributors/agents are also a red flag. We also say that the trick to luring people into a ponzi scheme is to make quick initial payments of the high returns that are promised. Here, too, Mr Dravid says that the scamster paid the promised returns, initially, but stopped paying after 2017. But that is exactly how ponzi schemes work. Strangely, Mr Dravid is related to luminaries in the financial world, but has apparently not bothered to seek guidance on investment.