Director Of Ponzi Firm Nabbed From Gwalior; Duped Investors Of Over Rs 10 Cr In Odisha

Bhubaneswar: The director of a chit fund company has been arrested for allegedly duping investors of over Rs 10 crore.

Babu Singh Kushwaha, Director and Promoter of M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd., was apprehended by the Economic Offences Wing (EOW) of the Odisha Crime Branch from Gwalior on February 13 and is being brought to Bhubaneswar on transit remand, an official release said.

He has been accused of cheating and duping as many as 500 gullible depositors to the tune of more than Rs 10 crore under the false promise of high returns on their deposits/ investments in different schemes launched by the company.

The release said that a case under Sections 406, 420, 467, 468, 471, 120 B of the IPC, Section 66 of the IT Act, Sections 4, 5, 6 of the PCMCS (Banning) Act, and Section 6 of the OPID Act was registered against Kushwaha on the basis of a complaint filed by Chandra Kanta Dash and others.

The Investigation revealed that Kushwaha was the only director of M/s Auroxa Deal Multitrade (OPC) Pvt. Ltd. registered with ROC, Gwalior, in May 2019. The company had floated various lucrative schemes/ packages that promoted direct selling of various household goods/ electronic goods with high returns having cashback offers.

The deposits collected by the company under the cover of direct selling are nothing but Ponzi Schemes and Binary Schemes. The business model is a simple pyramid structure, that works as a binary scheme in which the early entrants earn money and as the number of investors/ depositors increases, the scheme collapses at a point in time. Thus, the deceit and fraud are camouflaged under the name of direct selling marketing and business, the release further said.

M/s Auroxa Deal Multitrade (OPC) Private Limited was functioning in a rented building near Suraj Hotel, Sahadevkhunta, Balasore, from 2019 to 2020 and Kushwaha and other promoters of the company motivated the newcomers/ investors to join various business packages and collected huge deposits from the public.

Further investigation into the matter is underway, it added.