Fly-by-night operators lure ex-Army men

CHANDIGARH, OCT 3: Gulshan Kumar, the murdered owner of T-Series, is his idol. He began life as a despatch clerk in the Punjab National B...

CHANDIGARH, OCT 3: Gulshan Kumar, the murdered owner of T-Series, is his idol. He began life as a despatch clerk in the Punjab National Bank and floated his first finance company with a meagre Rs 25,000 in 1987. Meet Verinder Kochhar, 42, the rags-to-riches owner of the Rs 6-crore Nebula group of five finance companies in Jalandhar. Says this son of a postmaster who failed to clear the Indian Civil Service Exams: 8220;I felt I was wasting my talents doing six hours of work. How could a man supposed to be a DC work as a clerk?.8221;

Driven by the ambition to acquire 8220;name and fame8221; Kochhar expanded his initial business in three years from Nebula Financial Services to the group of five companies to add Nebula Mutual Benefit Society, Nebula Farms, Nebula Builders and DND Home Appliances to the list.

Flush with funds, Kochhar began hobnobbing with local politicians and military officials, he was even appointed the President of the Rotary International. The bubble burst six months ago when the maturity of fixeddeposits began to exceed fresh collections. To escape irate investors, Kochhar closed shop and went underground. His hapless manager, Colonel retd Balbir Singh was left to face the music till the police managed to track Kochhar down and arrest him last month.

Like the Colonel in the Kochhar story, there is an ex-Army man in almost all similar stories of fly-by-night operators who mushroomed in Punjab and Chandigarh over the past decade.

The modus operandi of all these fly-by-night companies is identical. All of them hired ex-servicemen as managers and agents to lure investments from the serving and retired government and defence personnel in the state. All of them issued post-dated cheques to investors which began bouncing once the money ran dry. At this point,they shut shop and vanished overnight,leaving their ex-servicemen managers to bear the brunt of investor and police fury.

Points out Chandigarh SSP C S R Reddy, 8220;They cleverly appoint their employees as directors, so while the promotersdisappear, their employees are liable to be prosecuted for what they have done.8221;

Rues retired EME Colonel Balbir Singh, who was working as manager for Kochhar8217;s Mutual Benefit Society: 8220;In the Army nobody knows the ABC of finance. So it is easy to dupe us.8221; Adds retired Signals Colonel Tarsem Singh who is the Jalandhar-based General Manager of Incan Mutual Benefit Society, which boasts as many as 67 branches and crores of investment from all over Punjab: 8220;Seventy per cent of our branch managers are ex-servicemen. We are hired for our credibility and honesty. But we are kept out of decision making or the inner workings of the company.8221;

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For retired defence officers, jobs like these are extremely alluring for apart from a decent salary there are the perks of a furnished house and air-conditioned car besides a generous commission for getting new business.

Small wonder that some of them like a retired artillery colonel heading an Incan branch in Jalandhar district, went from house to house of defencepersonnel in Garha village, motivating them to invest in the company.Retired Colonel Jagir Singh who invested Rs 1,27,000, says: 8220;I did it simply because of personal loyalty. If he had not been an ex-Army officer, people would not have invested money so readily.8221; Adds a retired Punjab government servant Kartar Singh: 8220;I invested Rs 1 lakh on his personal responsibility.8221;

Some managers are now being hounded by their friends and relatives as well. Says retired Colonel Daljit Singh who was the manager of Incan8217;s Adampur branch: 8220;My relatives, friends and subordinates in the Sikh Regiment together invested Rs 85 lakhs. Today they have filed cases against me, I am facing social stigma and mental harassment, while the Lucknow-based promoter Manjit Singh Aujhla has gone underground.8221;

The hub of the activities of the upstart finance tycoons remains the cities of Chandigarh, Jalandhar and Ludhiana, which together account for as many as 50 such cases under the economic offences wing of the police. All ofthese pertain only to the last two years the time when complaints of duped investors began pouring in.