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Fraud at IT firm, 7 held

They wanted to revive their company, which was hit by the economic downturn. But they ended up behind bars for allegedly cheating at least 1,100 investors of Rs 3.14 crore.

mumbai Updated: Oct 09, 2009 01:26 IST
HT Correspondent

They wanted to revive their company, which was hit by the economic downturn. But they ended up behind bars for allegedly cheating at least 1,100 investors of Rs 3.14 crore.

The Powai police, on Wednesday, arrested seven persons including the owner of a Powai-based information technology firm for committing fraud by launching an investment scheme to save their company from bankruptcy.

The main accused have been identified as Dr Kaustubh Choksi (31), chief operating officer and director of Sadharta Retails Limited and Sanjay Mehta (48), the director of finance. Five other employees were also arrested. The accused have been remanded to police custody until October 15.

“We followed a tip off and conducted an inquiry during the course of which the scam came to light,” said assistant police inspector Sahadu Waral. “Two agents are still wanted.”

The firm, which had offices in Andheri and Powai, is an e-commerce company. The police said the accused convinced investors to participate in a scheme, which promised to double their money in 20 days.

“The company was incurring losses due to the economic slowdown and Choksi had not been able to pay the salaries of his employees,” said Waral. “Mehta, who he employed in June, promised to introduce schemes to improve the company’s monetary condition.”

Mehta and a couple of his agents invited people to invest their money in the company and assured them of getting double the amount invested within 20 days. “The investors were also promised that if they invested thrice in the company they would be entitled to buy shares in the company. People invested up to Rs 3 lakh,” said Waral.

The accused started the scheme on September 24. The company defaulted on the first returns due on October 1.

The company owned offices at Andheri West and Powai.