CBI arrests Pearls group Director after being deported from Fiji in Chit-fund Scam

The Central Bureau of Investigation (CBI) apprehended an evading suspect upon his arrival in New Delhi in a case involving a multi-thousand crore Chit Fund Scam. After being deported from Fiji, the accused was returned to India. Since the beginning of this case, the accused has been missing.

The Trial Court issued an open-dated Non-Bailable Warrant of Arrest against him, and an INTERPOL Red Notice was also issued. This arrest was made as a result of CBI actions during “Operation Trishul” last year, when a request for the issuing of an Interpol Red Notice against him was sent. A request for his deportation was made through the NCB in Suva (Fiji). After being deported from Fiji, he was brought back to India by a CBI team.

The accused, a former Director and shareholder of a private firm, was alleged of being actively involved in the affairs of the aforementioned company and also present at Board Meetings when all significant decisions were made. He was also accused of conspiring with other Directors of the aforementioned private company to run the collective investment plan illegally and without statutory authority.

CBI had registered the case on 19.02.2014 against then Chairman/CMD & Promoter Director of a private company and others including the said private company, other private company & then Directors of these private companies after conversion of a Preliminary Enquiry registered earlier on the directions of the Hon’ble Supreme Court of India to enquire into the said allegations.

The investigation uncovered prima facie evidence of the private company raising several thousand crores in investments by providing phoney land allocation letters to entice investors. After the aforementioned firm was ordered by the Hon’ble High Court of Punjab & Haryana to wind up the scheme and refund the investors, a similar fraudulent programme was launched under the name of another/second private company. To avoid criminal punishment, funds acquired from new investors in this second firm were used to repay earlier investors in the original private company.

The two companies raised funds through a large network of lakhs of commission agents distributed across the country who were given handsome commissions for recruiting investors. It was also alleged that the accused, i.e. the promoters/directors of said private companies and others, illegally collected huge funds amounting to thousands of crores from approximately 5.5 crore investors across the country under the guise of sale and purchase of agricultural land and promise of high returns. These schemes were illegally operating, and both companies were reportedly engaging in fraudulent acts such as forging in their day-to-day operations.

A series of searches were conducted by CBI during February, 2014 at the office premises & residences of Directors and other suspected places in Delhi, Jaipur(Rajasthan), Chandigarh, Punjab & Haryana, which led to recovery of huge records & data relating to deposits from public and their mis-utilisation & diversion of funds, besides other incriminating documents.

According to the investigation, the accused fraudulently diverted said cash received under the auspices of a private firm established in Jaipur for putative investment in Australian enterprises. It was also claimed that 132.99 million AUD (approximately) was misdirected to Australian companies.

During investigation, CBI had earlier arrested four accused including then CMD & Promoter Director of Chandigarh based private company; then MD & Promoter Director of Jaipur based private company and two then Directors of said Jaipur based Company on 08.01.2016. It was then found during investigation that none of the land allegedly had marking of plots and none of the land was found in the name of said companies at Delhi, NCR, Madhya Pradesh, Rajasthan, Andhra Pradesh, even though the same was shown allotted by them to its investors.

The investors had not allegedly received any plot / land allotment letter from the company and almost all the investors to whom the company had allotted the land were unpaid. Most of the land was either non-existent or Govt. land or not sold by the owner. It was also alleged that there were more than 23 lakh enrolled commission agents and out of them, more than 1700 were top level field associates and several of these top level commission agents used to get monthly commission in lakhs of rupees. A chargesheet was filed against the accused including private companies on 07.04.2016.

Further investigation of the case was conducted to look into the involvement of other accused or suspects in this multi-thousand crore financial fraud that had harmed the interests of millions of investors.

In the course of subsequent inquiry, 11 suspects (all private individuals) from Delhi, Chandigarh, Kolkata, Bhubaneshwar, etc. were detained on December 22, 2021.

A Supplementary Chargesheet against 27 accused including 03 private companies was filed on 31.12.2021 before the Court of Special Judge, CBI Cases, Rouse Avenue District Court Complex, New Delhi. Of those named in Supplementary Chargesheet include 11 accused (all private persons) arrested by CBI. It was alleged that the accused were the co-conspirators in this scam, who aided the prime accused and others in illegally operating investment schemes for earning quick & easy money, inducing investors to invest their funds in such investment schemes which offered lucrative returns to the investors and thereafter in diversion of such funds through dubious means with the motive of misappropriation.