MUMBAI: The Enforcement Directorate (ED) has provisionally attached assets worth ₹84.24 crore belonging to the promoters of KBC Multitrade Pvt Ltd which is under the agency’s scanner for allegedly duping investors of over ₹200 crore by promising lucrative returns in a multilevel marketing scheme.
The assets attached on Tuesday included movable and immovable assets, including benami properties acquired by the firm’s promoters Bhausaheb Chavan, Arati Chavan and others. The attached assets included DEMAT account funds, post office savings, silver and diamond jewellery/bullion and bank account balances located in the state’s districts like Nashik and Thane, and Rajasthan’s Pali district.
The agency began its probe based on multiple First Information Reports registered by the state police in Parbhani, Nashik and other districts under various sections of the Indian Penal Code against KBC Multitrade and its promoters.
ED’s investigation revealed that the Chavan family, along with co-accused principal agents of the firm, had allegedly conspired to allure people through an MLM scheme run under the aegis of the KBC Multitrade Private Limited and KBC Club and Resorts Private Limited, promising them attractive refunds but subsequently duped them of over ₹200 crore. The investors were subscribed as members on payment of fees under various packages/ schemes propagated by the two firms with the promise of allegedly lucrative commissions, awards, rewards and product gifts, ED sources said.
The payment of the promised commission was allegedly incumbent upon the members enrolling more members, as a portion of the subscription amounts collected was to be distributed among the members at the top of the pyramid, the sources said. The members therefore got incentivised to invest, lured as they were with such promised commissions, even when there was allegedly no actual underlying business activity conducted by the entity.
{{/usCountry}}The payment of the promised commission was allegedly incumbent upon the members enrolling more members, as a portion of the subscription amounts collected was to be distributed among the members at the top of the pyramid, the sources said. The members therefore got incentivised to invest, lured as they were with such promised commissions, even when there was allegedly no actual underlying business activity conducted by the entity.
{{/usCountry}}“Earlier, statements of the main accused were recorded by the ED in the Parbhani district prison which revealed that the directors/promoters of KBC Multitrade Private Ltd and other co-accused used the membership fees so collected from the public for the acquisition of immovable assets, gold jewellery, investment in shares, among others,” an agency source said. ED had earlier conducted search operations under the provisions of the Prevention of Money Laundering Act on March 8 and 11 at 11 official and residential premises in Nashik and Thane and placed various movable assets of the accused under restraint.
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