RSJ fraud case: 2 directors arrested under MPID Act

Vijay Kumar Yadav

Vijay Kumar Yadav

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Officers of the economic offences wing (EOW) of the Mumbai police on Monday night arrested the two directors of the Ghatkopar-based Rasiklal Sankalchand Jewellers (RSJ) Jayesh Shah, 55, and Nilesh Shah, 53, in connection with a cheating case.

Police are interrogating the two accused to track down the money. Investigators are scrutinising four bank accounts linked to the jeweller and may freeze them soon, said another officer, on condition of anonymity. The duo will be produced in court on Tuesday. The brothers have been charged with investment fraud under sections of the Maharashtra Protection of Interest of Depositors (MPID) Act.

The complainants alleged that the Shah brothers floated several gold and cash Ponzi schemes by offering lucrative interest rates and collected deposits, but defaulted in returning the cash. They also accepted gold deposits.

“We have added Sections 3 and 4 of the MPID Act in the case and also Section 409 [criminal breach of trust by a merchant or agent] of the Indian Penal Code (IPC) in addition to the earlier Sections 420, 406 and 34 of the IPC,” said an EOW officer, who is part of the investigation.

On October 28, the jeweller had shut down the store, which led to rumours that they had gone bankrupt. Responding to it, one of RSJ’s directors, Zenil Jayesh Shah, had registered a non-cognizable (NC) offence against unidentified people for damaging the reputation of the jeweller.

Following this, on October 30, scores of investors gathered outside the store along with MP Manoj Kotak and the local MLA Parag Shah. The firm’s directors, too, arrived at the store and started returning gold to investors.

Investors claim the jeweller duped people to the tune of ₹300 crore