A day after the Economic Offences Wing (EOW) of the Mumbai Police arrested the chairman and managing director of a group of companies accused of duping over 20 lakh investors of Rs 2,000 crore from Pune, accused Balasaheb Bhapkar, 56, was produced before a local court Saturday.
The arrest came a day after the EOW raided 30 of his offices across the country following a complaint at Bandra Kurla Complex police station on Wednesday against Bhapkar’s firms Sai Prasad Properties Ltd. and Sai Prasad Foods Limited by the Securities and Exchanges Board of India (SEBI). The role of nine other subsidiary companies in sectors like petroleum, energy and media are also under the scanner.
While the SEBI lodged its complaint under the Prize Chits and Money Circulation (Banning) Act, the EOW has also invoked the Maharashtra Protection of Interest of Depositors Act.
Subsequent investigations have found that the firms allegedly offered investors returns of between 12 per cent and 18 per cent per annum and promised plots of land as surety in spite of not owning sufficient land, the EOW said.
”The firms offered various schemes ranging from daily collections, monthly installments and one-time payments that ranged between Rs 50 and Rs 10 lakh,” said Dhananjay Kamalakar, Joint Commissioner of Police, EOW.
He added that Bhapkar’s firm had been active since 2001 but only come under SEBI’s scrutiny in 2010 for carrying out investment activities without permission. According to the EOW, SEBI also served a notice to Bhapkar’s firms in January this year, directing them to wind up operations and repay investors.
On Thursday, a 50-member team of the EOW raided 30 premises across six states belonging to Bhapkar in a co-ordinated move and found that investment activity was taking place at 28 of those. “The investors are from the lower and upper middle class background and include many who are landowners. Sai Prasad group has a large network of agents who collect daily sums of as low as Rs 50 from investors from across 200 offices,” said a senior officer.
He added that the Bhapkar’s firms also provided lucrative options such as 500 square feet parcel of lands to those who invested Rs 1200 a month. “Investors received high returns on investment for the first few months before payments stopped,” he said.
Kamalakar said that the EOW had identified and frozen 192 accounts in 15 different banks belonging to the firm. “We are in the process of identifying properties owned by the accused and have found 56 agricultural and commercial properties totaling 1600 acres,” he said.
Most of the land, he said, is owned in Pune, Ratnagiri, and Ahmednagar, he said. Complaints have been registered against Bhapkar by the CBI, and Madhya Pradesh, Rajasthan and Chattisgarh police in the past.
Bhapkar’s wife Vaishali Bhapkar is presently in the custody of Chattisgarh police. Another Bhapkar family member and four other executives are wanted by the EOW.