Is Kashmir A Ponzi Paradise?

   

Whatever the strong safety and surveillance methods in place, Kashmir has emerged as a fraud-abundant territory. Nearly each season, frauds innovate their type of dishonest. The most recent, nicknamed Paisa Double rip-off, concerned a Chennai duo whose now-blocked firm took cash from individuals with a promise of spectacular returns after which silently fled, stories Masood Hussain

Kashmir is nothing new to fraud. Yearly, it incurs important monetary losses attributable to each on-line and offline fraudulent actions. Nonetheless, the one which hit the Vale final week is maybe the mom of all frauds that had been reported from Kashmir in the previous couple of years.

Two Tamil Nadu residents registered a personal restricted firm in Jammu on July 20, 2023. The 12 months is but to shut they usually have reportedly raised Rs 69 crore, closed its places of work and fled. Police investigating the case have situated Rs 14 crore transactions, to this point. They anticipate the determine will change as soon as the individuals give you particulars.  Apparently, the whistle-blower was not the tech-savvy system in place or a hyperactive governance construction however a blogger working from a distant south Kashmir village. Surprisingly, the shady firm had its footprints in north Kashmir and components of Srinagar.

“I presume the fraudsters had a correct plan to make a certain quantity inside a 12 months or perhaps much less however the leak led them to flee,” one firm affairs professional, mentioned. “Seemingly they’ve fled in such a haste that they left telltale traces of their crime behind, which now police are trying into.”

A Survey Firm

Registered at Channi Himmat in Jammu, as a personal non-government firm with a paid-up capital of Rs 10 lakh, it has two administrators – Ramesh Keerthi and Manickam Mariyadoss. A resident of Thanjavur in Tamil Nadu, Mariyadoss’s Fb web page – that has very scant data, claims he has studied at IIT Madras, went to Delhi Constitution Faculty, married in April and lives in Srinagar. It has {a photograph} of a devta that he has uploaded as his characteristic picture.

Ramesh Keerthi, the opposite director lives in Coimbatore, Tamil Nadu and has not left any data on any of his social media handles.

Open-source data suggests the corporate was “concerned in actions resembling structure and engineering actions, technical testing and evaluation.” Nonetheless, Haamid Bukahri, who’s the Registrar of Corporations in Jammu and Kashmir mentioned, the aim was otherwise said within the data his workplace has.

“They’d submitted their space of actions as renting of equipment and gear with out operators and private and house-holding items,” Bukhari mentioned. “The small print which are showing within the media about their actions are usually not talked about wherever. It’s nowhere written that they are going to be looking for funds and paying individuals higher returns. It’s utterly unlawful.”

Apparently, Healing Survey was included as a proprietorship agency on October 22, 2022, with its registered workplace situated in Chennai, Tamil Nadu. The exercise of this firm was mentioned to be “data service actions” and “different data service actions”.

Are the 2 entities the identical isn’t recognized? There isn’t any details about the Healing Service Chennai administrators in any respect. Nonetheless, staff who labored for the one which operated from Jammu mentioned they had been getting all instructions from Chennai.

Apparently, the web site of the corporate stopped working inside hours after the Jammu and Kashmir Police sealed their workplace at Karan Nagar in Srinagar. Their cell telephones additionally went dumb. They had been working three financial institution accounts inside a spread of two sq. kilometres in Jammu – Sure Financial institution Gandhi Nagar Jammu, HDFC Marble Market Jammu, and ICICI Channi Himmat Jammu. All three accounts have been seized by the Jammu and Kashmir Police. One banker mentioned the quantity that’s left with them is Rs 55,000 solely. “A lot of the transactions had been happening with a selected one,” he mentioned, providing no particulars. Sleuths investigating the rip-off mentioned the corporate managers have saved very minimal accounts within the three financial institution accounts which stand frozen now.

The Modus Operandi

The corporate had a primary Ponzi-style operation. It could register members for Rs 5000 charge and provides cuts from this quantity to the older members and the chain was rising. The “staff” had been purported to do a primary “survey” to entitle them to fortnightly payouts.

Because the senior members, who obtained into the chain early, began getting their payouts in time, they felt inspired to reinvest and in sure circumstances open a number of accounts. Experiences showing within the media counsel that its staff would reinvest their salaries within the methods they had been working for his or her masters.

Some firm members who protested in opposition to the fraud mentioned they used to deposit Rs 5000 as a safety deposit each 15 months. In response, the members used to assessment varied merchandise which might fetch them cash. Towards the deposited sum, individuals used to obtain Rs 3000 in return per thirty days. After many individuals made good cash, these becoming a member of the chain final month began reserving losses. The routine 15 questions they had been getting daily stopped. As they visited the corporate places of work, they discovered them locked after which the whistleblower Nafi Javed, a YouTuber gave the small print that despatched all people in shock. The corporate was working places of work in Jammu, Srinagar, Pattan, and Sangrama.

Survey Corporations have mushroomed in the previous couple of years. They’re paying both for responding to some questions on an organization or a product or they search higher-star rating for sure merchandise to allow the producer to enhance its star rating on social media. Tragically, it isn’t required that one is aware of the product or not.

Although the corporate was claiming that they had been investing in making some wellness and beauty merchandise, it’s but to be established. Apparently, the corporate can also be not a member of the Indian Direct Promoting Affiliation (IDSA), an affiliation of product producers who promote on to the buyer.

Ponzi schemes are fraud money-minting instruments envisaging the creation of an extended chain of “members” whose entry charge is split between the organising staff and the members. It’s a cheat taking his each sufferer as his companion. The fraud ultimately is uncovered when the brand new membership dries up.

What’s enigmatic is that the corporate had no authorisation for doing what it was caught doing in Kashmir. “Within the case of non-banking finance corporations, the system requires further compliances compared to non-banking corporations,” one professional mentioned. “Normally such schemes require formal permission from the banking regulator, the Reserve Financial institution of India (RBI) and Safety and Alternate Board of India (SEBI), which didn’t exist on this case.”

“The police are investigating the case they usually have registered the FIR,” Bukhari mentioned. “We will probably be collaborating with them. We could even write to the monetary intelligence unit for additional investigations.” The Cyber Police in Srinagar have registered FIR 39/2023 underneath sections 66D of the IT Act and 429 of the IPC. They’ve raided varied locations as properly. Police have summoned as many as 20 people for investigations and most of them are the corporate staff, a few of whom have additionally been duped. It isn’t recognized if both of the 2 administrators of the corporate has been situated.

Apparently, Bukhari identified that they may have gotten some inkling of the operations of the corporate as soon as they’d file their Revenue Tax returns. “Because it occurred nearly half a 12 months forward of the due date of return submitting, we had no concept,” he admitted.

An professional in firm affairs mentioned that the silence of the three banks can also be enigmatic. “Did they not see the paperwork and if they didn’t why didn’t they flag the problem when large transactions had been happening,” the professional, who needs to not be named, mentioned. “The corporate didn’t park its funds both with the JK Financial institution or with the State Financial institution of India. It went to a few personal banks.” Experiences showing within the media mentioned the corporate was submitting its GST recurrently.

Police have raided varied locations, seized the places of work and claimed to have retrieved some devices and data. It’s too early to supply an concept if they’ve succeeded in catching any of the administrators of the corporate. No person is aware of the place they’re proper now.

Nothing New

Off late, Kashmir has remained a fraud-abundant house. On December 15, 2023, barely days earlier than the paisa-double rip-off hit Kashmir, the Jammu and Kashmir Police filed a 382-page cost sheet in courtroom in opposition to two ladies constables, Nirmal Kour Saini and Arti Sharma, for orchestrating a coupon fund rip-off amounting to Rs 1.87 crore.

The 2 ‘sensible’ ladies had obtained one lakh rupees every from every complainant, falsely pledging a month-to-month curiosity of Rs 5,000. The accused, in collaboration together with her husband and one other girl constable, Arti Sharma, illicitly amassed money and gold from varied sources, depositing the funds with a finance firm and the gold with a financial institution for private use. The whole misappropriation amounted to Rs 1.50 crore and roughly 300 grams of gold.

Moreover, the accused had expanded their actions by partaking within the enterprise of digital devices and furnishings objects on the battalion headquarters to realize the belief of unsuspecting traders. The whistle blower on this case was the commandant of the actual battalion.

Chit funds are one other monetary software envisaging members of a bunch contributing equal quantities for a particular time with all collections going to at least one member at a time. As soon as the circle completes, the chit-fund season concludes. Normally practised by companies, this provides them interest-free capital at very low instalments (month-to-month or weekly and even each day membership charge). Usually, members of the group are recognized to one another and the deposits are small quantities.

Kashmir Valley Finance

Barely a month again the Jammu and Kashmir Police arrested Bashir Ahmed Mir of Kathpora, Kulgam, on the outskirts of Jammu metropolis, who was evading his arrest for 22 years. His story is extra attention-grabbing.

On November 26, 1990, he launched a Non-Banking Finance Firm – Kashmir Valley Finance and Funding Ltd. With banks off the scene and the JK Financial institution nonetheless residing within the shadows, the corporate opened a series of places of work throughout Kashmir and appointed a number of individuals as its staff.

It could settle for financial savings with a promise of higher returns. It continued for a few years and when the traders began looking for their funds again, the disaster took off. By then the banks had resumed their operations and a community was round. Police registered a case and the investigations began. On November 17, 2003, the Crime Department served challans in opposition to three high officers of the corporate together with the Managing Director, Manzoor Ahmed Shah, and Administrators Bashir Ahmed Mir and Munawar Mir. The challans had been produced within the courtroom of the Chief Judicial Justice of the Peace, with the Crime Department accusing them of duping depositors of Rs 50 lakh in Jammu and Kashmir. The criticism, filed by Zarifa Parveen and Bharat Bhushan of Jammu, alleged that the corporate had promised a 24 per cent curiosity each year, however upon maturity, officers had been nowhere to be discovered, resulting in a revelation throughout investigations that the corporate had duped harmless individuals of Rs 49,48,881.

The present standing of the case is that the Excessive Court docket had handed orders as early as 2001 to take over the properties, which the corporate owns, promote them within the open market and pay the traders accordingly. The courtroom route remained unimplemented for all these years because the Ministry of Firm Affairs lacked satisfactory employees in Jammu and Kashmir.

“We now have taken possession of the properties that the corporate had,” Haamid Bukhari revealed. “The Firm has claimed that it has landed properties at Pahalgam, Shilvat in Sumbal and Kandi Kupwara. The property at Sumbal and Kupwara are in dispute however not the one in Pahalgam.”

Nonetheless, the property is but to be offered. “We now have utilized to the Excessive Court docket for permission as a result of we have now to go for e-auctioning and anyone throughout the nation can buy barely greater than 10 kanals of land in Pahalgam,” Bukhari mentioned. “The whole legal responsibility of the corporate is six crore rupees and I imagine we are going to promote it at a significantly better price and pay the depositors accordingly.”

In Jammu, a number of individuals are busy in a protracted authorized battle in opposition to Debabrata Ghatak, Mohit Sircor, and Chandra Kant Parasrampuria, all residents of West Bengal and Administrators of Janpriya Finance Funding Firm since 2014. The petitioners together with Balkar Singh have alleged that the finance firm duped harmless individuals of Rs 6.25 crore. Although the division bench has handed the route of recovering the cash from the corporate, it was not instantly recognized if it has been completed or not.