Thursday, June 12, 2014

MASSIVE CHIT-FUND FRAUD BY PUNE BASED SAI PRASAD GROUP

Despite the Madhya Pradesh High Court order, two orders of SEBI and more than seven FIRs in various states, Pune based Sai Prasad group had the temerity  to run their chit fund racket without any hindrance.

On 27th March, 2014, the district & session court of Thane (Maharashtra) issued an Inquiry Order against M/s. Sai Prasad Foods Limited/ Sai Prasad Properties Limited and its promoters and directors, Mr. BalasahebBhapkar, Mrs. VandanaBhapkar and ShashankBhapkar. On the basis of that order Nagar Police Station of Thane City has registered an F.I.R. (No. 62/2014) and initiated investigation into the matter.
In July 2013, the Securities and Exchange Board of India (SEBI) had passed two orders against both the companies of Sai Prasad group and restrained them from collecting money from the public. (Click the below link to see the detailed order):
SEBI’s Order against M/s. Sai Prasad Properties Limited;
SEBI’s Order against M/s. Sai Prasad Properties Limited;

In 2012, Madhya Pradesh High Court had ordered Central Bureau of Investigation (CBI) to conduct investigation against Sai Prasad Group and other similar nature companies, on the basis of that the CBI had conducted an investigation and revealed its findings as stated below:
“It is clear that the companies used to receive deposits from the citizens by floating various types of plans viz. installment plan and lump-sum payment plan against the sale of land units, plants and that of livestock. The companies entered into contract with the investors and they have committed offences under section 3 (1), 3 (2) and 3(4) of Madhya Pradesh NiveshkokeHitonKaSanrakshanAdhiniyam 2000, Sec, 58B (5 and 5A), and 58 of the RBI Act, 1934, and Sec. 4, 5, and 6 of the Prize Chits and Money Circulation Schemes (Banning ) Act, 11978 and Sec. 420 of Indian Penal Code.” (Click the below given link to read an Order of MP HC)
Similarly more than seven criminal cases have been registered against M/s. Sai Prasad Foods Limited/ Sai Prasad Properties Limited and its promoters, directors, agents and branch managers in various states. Details of few cases are as under;
F.I.R.No. 15/12,Banswqada Police Station, Rajasthan
F.I.R.No. 136/13,Talcher Police Station,Odisha
F.I.R.No. 114/13,Ainthpali Police Station,Odisha
F.I.R.No. 635/13,Sikandarabad Police Station, Dis.Bulandshahar,UP
F.I.R.No. ***/**, Kanpur Police, UP
 M/s. Sai Prasad Foods Limited/ Sai Prasad Properties Limited and its sister concerns indulge in fraudulent fund mobilization rackets. They violate various rules, regulation and sections of the Securities and Exchange Board of India Act, 1992 by running “Collective Investment Schemes” illegally without permission of SEBI. They also violate the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, Maharashtra Protection of Interests of Depositors (In Financial Establishments) Act, 1999 and Rules, and Indian Penal Code, the Companies Act, 1956 and the Reserve Bank of India Act, 1934.  
                                               
 The promoters and directors of the company are projecting that M/s. Sai Prasad Foods Limited/ Sai Prasad Properties Limited and its sister concern companies are involved in business of sale purchase of land and foods products and are earning huge profits. But in fact, in the garb of projecting various business modules, they are luring innocent and uneducated people by offering heavy returns to invest their hard earned money in all the fake and bogus entities of Sai Prasad Group.
SAI PRASAD GROUP is paying heavy commission to their agents and middle men plus huge returns to investors, which is commercially not viable in such types of businesses. The group is claiming that they are paying heavy returns out of company's heavy profit, but in fact they are paying amount to an old investor, which they collect from the new investor and thereby circulating the money amongst the investors. These types of business practices creating criminal liabilities are punishable under the provision of and regulation of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, Maharashtra Protection of Interests of Depositors (In Financial Establishments) Act, 1999 and Rules, and Indian Penal Code.
Sai Prasad group is running joint ventures. But none of the investors get any land in return. They are in fact happy to get the money at the end of the maturity period. When the cycle of payments stops, the hard-earned money of the uneducated villagers will go down the drain.
The Sai Prasad Group had recruited around 12 lakh commission agents of various ranks, to lure the investors.  They are working part time/full time and convincing small investors by offering heavy returns. Agents of the group systematically join hundreds of investors in their unit and motivate them by giving a speech during a function or meeting organized at different venues.
Agents have received healthy commission including gifts like two-wheelers and even four-wheelers for recruiting people to join the scheme.
Court orders and investigations have failed to hinder the activities of Sai Prasad group in running their illegal chit fund scheme. Their Ponzy scheme is one such scheme.
Alert citizens should lead the way in creating awareness about this fraud and prevent innocent or ill-advised people from joining this chit fund.
Jai Hind,
Mohammed Usman,
President,
Forum for Fairness in Democratic System,
MUMBAI
Cell# 09322273393

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