Chit Fund Firm Director Arrested In Rs 10 Crore Cheating Case
Bhubaneswar: The Economic Offences Wing (EOW) of the Odisha Crime Branch arrested the director of a chit fund company on the charges of duping investors to the tune of Rs 10 crore.
The accused, identified as Babu Singh Kushwaha, Director and Promoter of M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd., was apprehended by the agency from Gwalior on February 13.
He was booked under Sections 406, 420, 467, 468, 471, 120 B of the IPC, Section 66 of the IT Act, Sections 4, 5, 6 of the PCMCS (Banning) Act, and Section 6 of the OPID Act. Later, the accused was produced before the JMFC, Dabara, Gwalior and is being brought to Bhubaneswar on the strength of transit remand.
The matter came to light following a petition filed by one Chandra Kanta Dash and others against the director and promoters of M/s Auroxa Deal Multitrade (OPC) Pvt Ltd.
During the investigation, it was revealed that M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. was registered with ROC, Gwalior during May 2019 and accused Babu Singh Kushwaha is its only director. The said company under various lucrative schemes/ packages promoted direct selling of various household goods/ electronic goods with high returns having cashback offers.
The deposits collected by the company under the cover of direct selling are nothing but Ponzi Schemes and Binary Schemes, said the police. The business model of M/s Auroxa Deal Multitrade (OPC) Private Limited is a simple pyramid structure, works as a binary scheme in which the early entrants earn money and as the number of investors/ depositors increases, the scheme collapses at a point of time. Thus, the deceit and fraud is camouflaged under the name of direct selling marketing and business.
It has been ascertained during investigation that during the year 2019-2020, the office of M/s Auroxa Deal Multitrade (OPC) Private Limited was functioning in a rented building near Suraj Hotel, Sahadevkhunta, Balasore. Accused Babu Singh Kushwaha and other promoters of the company motivated the newcomers/ investors to join various business packages and collected huge deposits from the public.
Further investigation into the matter was underway by the EOW.