Life’s savings of thousands of bondholders totaling several hundred crores are under threat as an alleged illegal money raising scheme has surfaced in Uttar Pradesh. Several complaints have been registered across the state by investors in two similarly named realty firms –Saiprakash group and Saiprasad group.
The Uttar Pradesh Police has arrested the chairman and promoter of Saiprakash Pushpendra Singh Baghel on charges of alleged cheating and forgery, while investigations are underway against both the groups, according to a senior UP police official.
“We received the first complaint on February 5. Two people including Baghel of Saiprakash are already under arrest. Several complaints have been registered across the state against Balasaheb Bhapkar and Shashank Bhapkar of Saiprasad group as well. Investigations are on,” the official from Kanpur told Business Standard over phone.
According to the official, the companies issued “bonds” to raise money from the public and have since defaulted payments. Cases have been registered under sections 420, 406, 467, 468 and 471 of the Indian penal code. These sections, which deal with cheating, forgery etc, have provision for imprisonment up to 10 years, if proven guilty.
Some agents of both these companies have also been detained by the police in Agra and Kanpur for investigations. Illegal schemes by real estate companies raising money from public in the form of different kinds of bonds and debentures promising fantastic returns have proliferated in the countryside, which are ignored by banks and mainstream financial institutions.
While the Saiprakash top brass is behind bars, other officials could not be reached. Shashank Bhapkar said, his company’s name was dragged in by Bhagel, when he was arrested. “There was some confusion initially. We have already clarified that we have no connection with Saiprakash.” He directed further queries to Sanjay Roy, CEO of Saiprasad. Roy did not pick calls made on his mobile phone.
Business Standard had in January reported that a multi-agency probe is underway against the activities of Saiaprasad group following several complaints and the subsequent investigations by the Goa police and Ministry of Corporate Affairs. Even the Securities and Exchange Board of India is also looking in to the affairs of the company.
In a press release issued at the launch of its TV channel, Saiprakash group had described itself thus: “Founded in 2009, under the able leadership of Pushpendra Singh Baghel, the Sai Prakash Group of companies is an eminent business group from Madhya Pradesh. The group has diversified business interests. The group’s Vision & Mission is to enhance and sustain an environment of trust and service for its valuable customers, through its growth as a leading company in the area of properties development, telecommunications, organic farming and other endeavours.”
