Court denies anticipatory bail to duo in ₹18.35-cr fraud

According to the prosecution, the applicants persuaded the complainant and 111 other investors to invest in firms run by co-accused Dipen Thanawala and Rashmikant Thanawala by promising assured monthly returns of 2% and falsely projecting Dipen as a derivatives trading expert with a PhD.

MUMBAI: A special court under the Maharashtra Protection of Interest of Depositors (MPID) Act has rejected the anticipatory bail pleas of two men accused in the alleged Thanawala Wealth Management investment fraud, holding that there was prima facie material to show they actively misled investors rather than merely introducing them to the scheme.

Court denies anticipatory bail to duo in ₹18.35-cr fraud

Additional Sessions Judge N.G. Shukla, in an order passed on Wednesday, denied pre-arrest bail to Sagar Kalyani and his father, Piyush Kalyani, who are booked by the Economic Offences Wing (EOW) under the Bharatiya Nyaya Sanhita, the Information Technology Act, the MPID Act and the Prize Chits and Money Circulation Schemes (Banning) Act.

According to the prosecution, the applicants persuaded the complainant and 111 other investors to invest in firms run by co-accused Dipen Thanawala and Rashmikant Thanawala by promising assured monthly returns of 2% and falsely projecting Dipen as a derivatives trading expert with a PhD.

The FIR states that 111 investors collectively invested ₹15 crore, while the complainant invested ₹3 crore, taking the alleged fraud to ₹18.35 crore. The prosecution alleged the applicants received substantial commissions and acted in concert with the principal accused to induce investments.

The Thanawala father-son duo was arrested by the EOW in April. Investigators alleged they operated an investment scheme promising fixed monthly returns and profits from derivatives trading and pre-IPO investments before defaulting on repayments. They also allegedly circulated fabricated electronic records, including purported overseas remittance documents, to reassure investors awaiting refunds.

The applicants argued that they had merely introduced investors to the Thanawalas and that all funds were transferred directly to the principal accused. They claimed the money they received comprised repayments of their own investments, interest and commissions, and relied on emails and WhatsApp messages to show they had repeatedly urged the Thanawalas to refund investors.

Rejecting the pleas, the court observed that the applicants’ role went beyond introducing investors and extended to making false representations to induce investments. It noted there was no material to support the claim that Dipen Thanawala held a PhD in derivatives trading, making the representation prima facie misleading.

The court also noted that the applicants continued reassuring investors through a WhatsApp group after payouts stopped and had received commissions. Significantly, while investors allegedly stopped receiving returns and refunds, the applicants and their family members continued to receive interest, repayment of their investments and commissions, indicating they were “hand-in-glove” with the principal accused.

Holding that the applicants appeared to have benefited from investors’ money, the court said further investigation, including a forensic audit, may be necessary. It also rejected their offer to deposit ₹1.30 crore, ruling that it was no ground for granting anticipatory bail.