Sep 11, 2009 04:54 PM
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(Updated Sep 25, 2009 06:55 AM)
COPIED FROM TIMES OF INDIA 25 SEP 2009 Bihar neta flies in to count his cash C Unnikrishnan I TNN
Mumbai: A seasoned politician from Bihar, known for switching his loyalties every now and then, recently flew down to the city, to find out how safe his investments—running into lakhs in City Group of companies—are.
Two of the Group companies, City Limouzines and City Realcom, are in trouble for not paying returns to thousands of people who had invested in schems promoted by those firms.
According to a source, the politician met the Economic Offences Wing (EOW) officials and said he was satisifed with the assurance given by the legal advisers to the company about the safety of investments. “The politician and several of his family members had invested in the schemes. He also said a senior IPS officer too was worried about his money, ’’ the source said.
Thousands of investors, like this politician and the police officer, are hoping that they would not lose their money parked in these firms. A diamond broker invested Rs 2.5 crore in both the companies. “They have paid nearly Rs 1.5 crore, ’’ he said. A businessman invested Rs 50 lakh through several companies but managed to recover only Rs 27 lakh. Several policemen from the city have also parked their funds.
Though there are no figures readily available about the number of investors or total money collected, almost every person involved had the same sad sorry to narrate. “Some withdrew their bank deposits to invest in these companies as it offered 48% returns. Even senior citizens have put in their retirement benefits. There are others who have sold land, flats and jewellery to invest in these companies. Some, who were fortunate to make quick money, again put in their money, hoping for more, ’’ a police officer said. One of the “victims’’, who is trying to bring the investors together to put up a tough fight, had invested the money accrued from the sale of his flat in the company. “I put in Rs 15 lakh in several schemes but received only Rs 3 lakh, ’’ he said. Unfortunately, there are several who invested recently and did not get anything back. “I invested Rs 1 lakh this July and a month later, it’s gone down the drain, ’’ one such person said.
*Cops register fresh FIR in Limouzines case
The Economic Offences Wing (EOW) of the police is in the process of registering a fresh FIR in the City Limouzines case.
This has been prompted by the barrage of police complaints being lodged against City Limouzines and its sister concern, City Realcom.
On Thursday, an hour before the Bombay high court was to hear a PIL, demanding stringent action against the company management, the police delivered a letter to the petitioners, saying they were taking "suitable legal action''. One of the investors, Kirti Patel, had moved court, urging it to direct the police to register fresh FIRs and arrest the accused.
Patel’s lawyer Bhavesh Parmar told the court that he was not pressing for the PIL following an assurance from the police. A division bench of chief justice Swatanter Kumar and justice A M Khanwilkar said they hoped that the "police would take action based on this letter''.
The EOW had been examining if it was required to register fresh FIR as a case was already registered against City Limouzines in 2007, based on a complaint by Jalandhar Pansare. The Supreme Court had imposed restrictions on the investigations of this FIR, such as, ther should not be any hindarance to the company's business.
The EOW is now reportedly exploring the possibility of registering an FIR in the Realcom case where investors were promised huge returns. For instance, on an investment of Rs 1.39 lakh, people were promised a payment of Rs 7, 775 every month for five years and Rs 50, 000 at the end of the scheme. Additional commissioner of police (EOW) Sanjay Saxena said the department was deliberating on various options. Saxena is also coordinating with police in New Delhi and Chennai, where in a similar fashion, the company has defaulted on its repayments to investors.
LOST FORTUNE? Many of the investors had sold off their flats and lands to invest in the City Group schemes
