The ECONOMIC Offences Wing (EOW) of the Mumbai Police last week arrested two directors of an Indore-based pharmaceutical company following complaints from several investors that the money they had invested in the fixed deposits of the firm had not been repaid. According to the police, the father-son duo had promised attractive returns on the fixed deposit of its listed company but defaulted on the payment. The duo was granted bail Thursday.
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According to the police, in 2013, Plethico Pharmaceuticals Ltd floated a scheme to provide 11 to 12.75 per cent interest on FDs offered by the firm. However, the firm soon started defaulting. In 2013 over 130 investors lodged a complaint with the Mumbai Police and the case was transferred to the EOW.
After the probe established the culpability of the directors – Shashikant and his son Chirag — the EOW arrested them.
“As many as 18,455 investors had invested in the company, of which 7,000 were from Maharashtra. Once the firm started defaulting, the investors lodged a complaint. We probed the allegations and found that the company had indeed cheated them,” said an officer.
During interrogation, the two had allegedly claimed that they floated the scheme to invest the money for their business; however after the business collapsed, they were unable to pay their investors. The EOW has sealed their properties in Indore and Mumbai, including the two official premises and the director’s suburban residence.
On its website, Plethico Pharmaceuticals Limited calls itself a leading global healthcare / pharmaceutical company with a strong emphasis on the herbal and nutraceutical segments. The company was established in 1991. Plethico operates in the segments of Sports Nutrition, Confectionary and OTC in India. The company has a portfolio of over 200 branded products sold in more than 60 countries.
When contacted, advocate Sudeep Pasbola, who had appeared for the bail, said that while the EOW claims 18,000 investors were allegedly not repaid the deposits—with the amount being pegged at Rs.172 crore — only 135 people have come forward and the irregularity is of Rs 3.5 crore. “The duo have been granted bail by the court. They got a cash bail of Rs 3 lakh each and the surety was Rs 1 lakh each,” said Pasbola.
When asked if the scheme was floated to invest in their present business, Pasbola said that many companies do raise capital from the market through such schemes.