Thursday, April 25, 2013

The Ponzis and the Scapegoats - I!!



Year back, a regular customer of our medical store asked me to invest a small amount into a private investment scheme. He also mentioned that he too would be benefited form my investment but I was not in mood to oblige him. He was quite unhappy with my decision even told me that he being a regular customer and he is taking medicine worth thousands rupees every month and I should return a favour against it. I was quite taken aback and amused as if he was doing a favour to me by paying thousand bucks against the medicine of same amount he used to purchased. During that period whenever he met me he never hid his unhappiness and I was least bothered by it. After some time the said investment scheme collapsed and now he realised the mistake but only after losing some undisclosed amounts.

We are living in a messy epoch and  investment is the only way to grow our money. We need more money, as the life expectancy is more than what it used to be and lifestyle too is more complex but investment not mean to throw my hard earned money to a dustbin and wait for a return. What happened in Bengal with Chit Fund is shows that people need to be educated against this scamsters. In rural India people still not familiar with the banking system and only the rude banking officials should be blamed for it. These unregulated investment scheme reach out to the poor and make a merry with their hard earned money. The chit-fund business continues to flourish in West Bengal despite the Reserve Bank of India (RBI) initiating action against two companies for misusing the regulator's name to invite deposits from the public.  Before, it happened with Sanchayita scheme and now it is with Shradha group.

These scheme also known as Ponzi scheme. The scheme gets its name from an Italian American called Charles Ponzi who in 1919 ran an investment scheme in  Boston, which promised to double the investor’ s investment in 90 days. This was later cut to 45 days. At its peak the scheme managed to collect around $40 million and had nearly 15,000 investors.

The Scam and the Scamsters

Stock Guru

 Ulhas Prabhakar Khaire, 33, and his wife Raksha J Urs, 30 had floated a company, Stock Guru India, promising to double investors' money in six months. They had launched a high-profile promotional campaign and even roped in celebrities. Masters of disguise, the couple had changed their names to Lokeshwar Dev Jain and Priyanka Dev Jain while running the company and disappeared with the investors' money. Delhi Police nabbed the couple from Ratnagiri in Maharashtra, where they had opened another fake investment company. Police said the couple changed their looks and assumed new names based on stolen identities for each of their fraudulent operations. The scam came to light around April last year after investors complained to the police. In Delhi alone, cops have received 14,303 complaints from investors who had put in money ranging from Rs 10,000 to Rs 60 lakh in Stock Guru India.

Sanchayita

in the early eighties when several investors and agents committed suicide. Sanchayita collected more than Rs 120 crore in 1980 before its offices were raided and it folded up with only a handful of people getting back a minuscule amount of money. Two main promoters of the group were arrested with one of them Shambhu Maukherjee committing suicide and Swapan Guha being declared insolvent by the court. Another accused Biharilal Morarka is still at large. As for investors and agents there are reports of several committing suicide and a handful pinning hope against the hope with a criminal case dragging on in court for more than 30 years now.

!!!The safe way to double your money is to fold it over once and put it in your pocket. -  Frank McKinney!!!

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