Hotelier accused of duping investors

MUMBAI, AUG 1: A hotelier and finance company director accused of duping more than 200 persons to the tune of Rs 2 crore has moved the Se...

MUMBAI, AUG 1: A hotelier and finance company director accused of duping more than 200 persons to the tune of Rs 2 crore has moved the Sessions Court for anticipatory bail. Principal Judge A S Aguiar on Friday passed an interim order directing the Mulund police not to arrest Shantaraj Yellappa Shetty, owner of Sandeep Restaurant at Mulund. The case will now be heard on August 6.

According to PSI Prakash Babar, who is investigating the case along with Senior PI Vasant Jadhav, Shetty, along with his wife Sujata, is also the director of Sandeep Finance. The company’s share capital was Rs 10 lakh, but Shetty and his wife invested just Rs 2,000 totally, said Babar. After registering the company with the Registrar of Companies (ROC), Shetty began spreading information locally that his company was ready to accept deposits from members of the public as per the rules and regulations laid down by the Reserve Bank of India (RBI).

Shetty also told depositors that he would give two per cent interest per month. Thedeposited amounts – cash in 90 per cent of the cases – ranged between Rs 50,000 and Rs 10 lakh, and Shetty totally collected Rs two crore from 240 depositors. This amount wasn’t deposited in the bank account of Sandeep Finance, police said, adding that while Shetty issued deposit receipts, he omitted mentioning the rate of interest or date of maturity of the amounts.

The fraud was uncovered when one Sadhu Shetty, who along with his grand-daughter deposited Rs seven lakh with Sandeep Finance, lodged a complaint that they were issued incomplete receipts of Rs 2.56 lakh only. Complaints against Shetty started pouring in, with depositors telling the police that when they demanded their money back from Shetty, he threatened to lodge false complaints against them. Shetty even lodged false complaints of extortion against nine depositors.

Investigations revealed that Shetty had not registered Sandeep Finance with the RBI, nor had he taken prior permission to accept the deposits. Shetty had not even submitted hisfirm’s balance-sheet before the ROC.

A case (366/99) has been registered by the Mulund police under sections 406 (punishment for criminal breach of trust), 409 (criminal breach of trust by agent, bank, public servant etc), 420 (cheating), 506 (criminal intimidation) and 120(b) (conspiracy) of the Indian Penal Code. In his anticipatory bail application, Shetty denied all the allegations and maintained that a false complaint has been lodged against him.