Balasore: The Economic Offences Wing (EOW) of Odisha Crime Branch Thursday arrested here two upper line members of a chit fund company in connection with earlier fraud to the tune of Rs 10 crore.
A source said that the accused duo has been identified as Sarat Kumar Nayak and Prabhat Ranjan Das. They were associated with the chit fund company M/s Auroxa Deal Multitrade (OPC) Private Limited. The EOW arrested both from their residences in Balasore.
Director and promoter of the ponzi firm named Babu Singh Kushwaha was previously arrested by the EOW officials, the source added.
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Three accused have been remanded to judicial custody, following production before designated court under OPID (Odisha Protection of Interests of Depositors (in Financial Establishments) Act, Balasore.
“M/s Auroxa Deal Multi-trade (OPC) Private Limited was functioning from a rented building near Suraj Hotel in Sahadevkhunta locality of Balasore district. Director and promoter of the company named Babu Singh Kushwaha allegedly duped as many as 500 innocent depositors to the tune of more than Rs 10 crore,” a senior EOW official said.
The chit fund company previously had made false promises of giving high returns to its depositors on their investments, under different fiscal schemes launched by the company, the EOW official stated.
Following a detailed probe into the chit fund related fraud, it was ascertained that the company had collected more than Rs 10 crore from as many as 500 depositors and subsequently duped them. Probe into the case is still underway, a statement issued by EOW read.
“Business model of M/s Auroxa was a simple pyramid structure and worked as a binary scheme in which the early entrants earned huge money. As the number of investors and depositors increases, the scheme collapses at a point of time. Thus, the fraud is camouflaged under direct selling and marketing,” the EOW statement mentioned.
It is pertinent to mention here that the EOW had registered a case in this connection based on a written report made by Chandrakanta Dash and others and initiated a probe into the said fiscal fraud.
A detailed probe revealed that the company promoted direct selling of different household goods and electronic goods with alluring returns with cashback offers under its several schemes and packages.
The three accused persons of the chit fund company had made wide propaganda in Odisha and motivated the innocent depositors.
PNN