Chit Fund Means in India : Few Points about Scam of Lakhs of Crores

“Why Government is not nabbing all the directors of errant companies, who fled away with poor people’s hard earn money?  They all should be behind the bars first, same as in the case of Sahara India, then start recovery process.” Virendra Pandey, Chief Promotor, Yuva Shakti Pratishthan

Mr. Virendra Pandey : A Crusader To Stop The Chit Fund Menace  

Mr. Virendra Pandey wrote an article, in which he is questioning to the government for recovery of poor citizen’s money looted by the chit fund companies of India. He emphasis on size of the scam not only in the financial aspects but huge hawala transactions and black money generated and stashed abroad. He also says that government should form an SIT and investigate this scam. Here is the full article:

Illegal CIS Menace

I have come to know that general public and small / medium investors invested their hard earned money in various “quick earn and quick make rich schemes” with higher returns and various incentive promised by companies for promoting products / services wherein a person has to become a member / agent or in other words buy a product to become an agent (interpreted by different names by different companies) and make more members under them and sell the company’s products / services as it was sold to him for which he is offered a hefty commission and incentives thus expanding their tentacles faster and raking in money in hundreds and thousands of crores through MLM / network marketing route and promoting themselves as sale/ purchase or service provider company and circumventing the law of CIS scheme.

After receiving various complaints, I conducted a detailed investigation through our financial and legal experts in the workings and financials claims done by various companies Like PACL, SAIPRASAD GROUP, SAIPRAKASH GROUP, SAMRUDDHA JIVAN Etc. and we have come to the conclusion that there are huge financial irregularities running into thousands of crores and all the claims made by your company through the directors and agents are absolutely false baseless and frivolous.

Do PACL has 60 Lakhs 43 Thousand 388 Sq. Acras Land Bank?

We, gave them an opportunity of being heard by sending notices through our advocates, but there was no reply from them till date we started submitting our finding with law enforcement agencies and now even Security and Appellate Authority has dismissed there claim and ordered PACL TO REFUND Rs. 49,100 CRORES to the 5.85 CRORES CUSTOMERS. Therefore a question arises if the PACL has collected money from 5.85 CRORES CUSTOMERS @ 7500/- per unit then where has the money gone because as per SAT order each customer will get only Rupee 839.31 that to I doubt if the company has sufficient asset to return it. 

As per my calculations, if PACL handed over the 500 Sq. Yards land piece for Rs. 7,500 investment, and if there are 5.85 crores inventors, they must hold a land bank of approximate in the size of 29,25,00,00,000 Sq. Yards land. This is approximate 60 Lakhs 43 Thousand 388 Sq. Acras.

Tons of Questions, No Answers

I had asked how much land with clear marketable title is in possession of your company as on 31st December 2014 along with supported documents state wise.

I had asked how many plot holders do they have as on 31st December 2014 provide list State wise? Which now it is clear by the order of SAT that PACL has 5.85 crores.

PACL has collected more than Rs.40000 crores, I had asked PACL list of people from whom they had collected the amount state wise?

I had asked how many farm houses do PACL possess State wise details.

I had asked whether farm houses are operative?

I had asked why you take Power of Attorney from customer on blank paper.

I had asked why registration Letter, Allotment Letter etc. are issued on letter head of company, instead of any government letter or stamp paper?

I had pointed and demanded PACL company officials about their Auditor of your company has observed that there a discrepancies regarding title and ownership of land, requested give us complete list of such property.

I had requested the company to give us complete list of advances paid for purchase of land along with location of plot and owner/sellers/authorized persons, name to which advances have been paid.

I had asked why has PACL made investments in 100’s of companies like MDLR/ blue coast resorts etc which has no business revelation with the objectives of PACL and is nowhere mentioned in the j/v cum investment agreement of the investors/agent.

I had asked why has directors of PACL and subsidiary companies entered into 100’s of companies in which funds from PACL or its subsidiaries was infused or invested and after some time this directors got retired and went on in some other company doing the same modus-operandi, what is the status of funds which was invested into such companies as this invested funds were collected from lakhs of small and medium investors/agent from across the country in the name of j/v in property development business I shall now right to various law enforcement agencies to enquire the assets and properties of all the directors associated with PACL and its subsidiaries where they have entered and resigned.

I had asked to give us list of complete advances for purchase of land, which are doubtful in the opinion of your company auditor.

I had asked to give us list of loans and advances. Do you receive interest on such advances? Have you taken any permission for granting any such loan from the investors, if yes give us details?

I had asked Why PACL has paid commission and incentive in advance? Give us the complete list of commission and incentive paid in advances and purpose why it is given in advance? Also please provide us the copy of TDS deducted by PACL from the commissions and incentives paid.

Fooling Government and Investors in the Name Of Development of Land

I had further observed that PACL give’s service of development, maintenance, custodian caretaker of the plot which you allot to its investors/agent at a price with a guaranteed high returns thus providing your expertise as service to your clients and do any sale why you should not be termed as service provider and government should not collect service tax from you?

Why Fund Transfer to Australia?

It was further noticed by me that huge amount of funds was transferred to Australia without the permissions of the investors/agents of company thus indulging into illegal trade practice and also may be money laundering.

Where is the Land?

As per the opinion report submitted by my financial expert I doubt that the company does not have sufficient clear marketable land as it shows in the books of account and as shown that they have allotted.

Fake Land Dealing by Company

I have sufficient proof that you have indulged into fabricating of fraud property documents through your front people and office bearers to purchase fraudulently force fully properties and register properties in Raigad district by producing dummy vendor?

I think that by playing the number game of companies and rotating funds from one company to another company and further in some other company you have purpose fully tried to siphoned thousands of crores of hard earned invested funds of the investors/customers/agents and may have transferred it to Australia by illegal means.

I also found that the advances for purchase of land to the tune of Rs1484.63 crores have been paid which seems to be doubtful in nature. Please provide the necessary documents of the parties to whom the advances where paid and for which land??

In the opinion taken their financial experts they have found out that a total amount of 2892.99 crores have been invested in a shady manner my client would like to know the details of investment, name and address of parties to whom the funds were given and purpose of transaction?

Let’s end the Chit Fund menace… Let’s begin the war against financial loot by the crooks in the disguise in the corporate companies.