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Tag: scam

  • The Piyush Jain Case – Perfume Bizman of UP and Black Money Hoarder

    If you have gone through the news, you will find a story of a Kanpur businessman surfacing everywhere. Packets of seized currency notes after Income Tax officials’ raid at the premises of businessman Piyush Jain, in Kanpur, on December 24, 2021. Piyush is a businessman of perfumes in the perfume capital of India. India’s tax authorities have seized wads of currency notes running into millions of dollars and several kilograms of gold from the premises of the businessman.

    This article is about Piyush, the money recovered and everything in between and after that. We will read about the perfume capital of India. How Piyush is found guilty, how did the money that was found come to Piyush and where is he now ?

    The Piyush Jain Case
    Kanauj – The Perfume Capital of India
    The ‘Eyebrow raising’ Simple life of Piyush Jain
    Political Agenda Behind the Piyush Jain Case
    The Same Name issue
    The Pile of Money Recovered from Piyush Jain
    FAQ

    The Piyush Jain Case

    It was the 24th of December when a news story showed that a Kanpur based perfume businessman was caught with about 200 crores of cash in his house. Piyush Jain, the Kanpur based perfume trader was found with this questionable amount of money in his house.

    Tax officials raided his house and found this enormous amount of money and kilograms of gold. The simple and normal looking person as Piyush was to the outsiders, the news piece was a surprise not only for the country but even to the people who knew him.

    The intelligence wing of the goods and services tax department found unaccounted wealth, including around 23 kilograms of gold in the form of biscuits and currency worth over $24 million, from a perfume trader. The seizures were carried out at the premises of Trimurti Fragrance Pvt Ltd, Odochem Industries and a transport company called Ganpati Road Carriers, all based in the north Indian state of Uttar Pradesh.

    “This is the biggest ever seizure of cash by the Central Board of Indirect Taxes and Customs. The documents seized from the premises are under scrutiny,” the statement said. During interrogation, Jain also accepted that the cash recovered from Odochem Industries is related to the sale of goods without payment of GST.

    Kanauj – The Perfume Capital of India

    Kannauj is a little city in Kanpur in the Indian state of Uttar Pradesh. The fact that its history is rich in the fragrance of perfume makes it the perfume capital of India. Being the perfume capital in the second-most populous country in the world elevates its already shiny appearance to the country and the world outside.

    The city of Kannauj is a little over 2 hours away from Kanpur in the state of Uttar Pradesh. The fact that Kanauj is primarily known for making perfumes should not be regarded as a ticket for cheap perfumes with quality. Even better, you will find the very popular variety of perfumes called attar. Attar is the regal perfume of the ancient world.

    It is said that the city has a long history of making perfumes. Some experts even say that the perfume practice dates back up to thousands and thousands of years. The art of attar is well known in the city.

    While perfumes are made from alcohol or have some or the other constituent that is based out of alcohol, the attar is completely different. Attar is made from essential oils, which makes it unique and attractive.

    The ‘Eyebrow raising’ Simple life of Piyush Jain

    Piyush Jain lived a very simple life. He never indulged in any sort of luxury behaviour or any expense that seems unusual. He lived a simple life, had a simple car, and always dressed simply.

    Piyush’s father was a soap manufacturer hailing from Mumbai. Piyush and his brother were noticeably studious and both went on to get masters in the stream of science. The brother’s wives had bachelors degrees in science. They were a single-family with knowledge of science in abundance. With that knowledge, they started manufacturing compounds of perfumes.

    The family mastered the art of manufacturing sandalwood oil through chemicals at a low cost, rather than from natural sandalwood, and thus started earning huge profits. Piyush Jain used to sell the perfume compounds to different foreign clients. Among others, he also supplied fragrance to the Shikhar Pan Masala company.

    Let us see what people have to say about the case and the “Eyebrow raising” simple life of arrested Piyush Jain.

    Mr. Suresh, who has known Mr. Piyush Jain for four decades, said there was no criminal case against anyone in their locality. Mr. Piyush Jain is a “wonderful human being” who lived a “simple life” and did not even carry any security with him, said Mr. Suresh. “I cannot understand how he got trapped in this matter,” he added.

    One of the close acquaintances of Piyush Jain said Jain always used to dress simply. Besides his bungalow, He owned a scooter and used to drive around his Hyundai Santro and an old Toyota car.

    According to Mr Gupta, Mr. Piyush Jain’s father worked in a soap manufacturing company in Mumbai. Piyush and his brother both had masters degrees in science while their wives had bachelors degrees in science. Using this knowledge of chemicals, the family started manufacturing compounds for perfumes, said Mr. Gupta.

    The family mastered the art of manufacturing sandalwood oil through chemicals at a low cost, rather than from natural sandalwood, and thus started earning huge profits, said Mr. Gupta.

    Mr. Gupta also said Mr. Piyush Jain “had a lot of faith in his religion” and made contributions of ₹60-70 lakh for the building and revamp of two Jain temples, including one in Tirwa.

    A perfume trader from the Jain community said he would often bump into Mr Piyush Jain at the temple. “He is a simple and sober person, had nothing to do with the society, even to the extent that he never made anyone his confidant,” said the trader.

    PNB Scam: How Did Banks Lose Money in Nirav Modi Case
    Nirav Modi defrauded the banks of over Rs14,000 crore with his uncle Mehul Choksi. Here’s how he operated the PNB scam and took the loan from the banks.
    StartupTalkyManav Makhija

    Political Agenda Behind the Piyush Jain Case

    PM Narendra Modi publicly announced that Uttar Pradesh has a fragrance of corruption and black money under the rule of SJ. SJ here means the Samajwadi party, a leading political party in the state of UP.

    As it is the time of elections and each and every political party is trying to prove that they are the clearest and clean. This news of Piyush Jain, a perfume trader, stacking hundreds of crores told a completely different story.

    PM also alleged the Samajwadi party for being related to the scam and corruption in the perfume capital of India. The case has turned into a political agenda where the motive is to qin elections.

    The Same Name Issue

    According to the most recent reports, there are actually two P.Jains in the city of Kannuj. One is the arrested Piyush Jain and the other person is named Pushpraj Jain. Pushpraj is also a perfume trader and has the same name initials.

    The 60-year-old Pushpraj Jain is a “philanthropist” in Kannauj and a politician who also owns a petrol pump and a cold storage unit and has a house and an office in Mumbai.

    The news probe stated that there must have been a change of names and the wrong person was raided. It raises more concerns on the authority to recheck the records and make sure that the correct person is raided. If this raid was unnatural then there can be supposedly more traders with black money.

    The Pile of Money Recovered from Piyush Jain

    On the 24th of December, it was reported after a raid on Piyush’s residence that a huge sum of money was recovered from his home. The directorate general of GST intelligence said that the first amount that they recovered was about 177 crore rupees from the residential premises of Odochem Industries in Kanpur. It was one of the biggest raids and seizures by the CBIC officials.

    Piyush Jain Kanpur Raid
    Piyush Jain Kanpur Raid

    The Directorate General of GST Intelligence said it first recovered unaccounted cash of ₹177.45 crores from the residential premises of Odochem Industries in Kanpur, in the biggest ever seizures by the CBIC (Central Board of indirect taxes and customs) officials.

    The story doesn’t end here, it was probably the beginning. The DGGI officers then recovered ₹17 crores in cash from the residential factory of Odochem Industries in Kannauj, while also recovering around 23 kgs of gold and a huge quantity of raw materials used in the manufacture of perfumery compounds. Everything until this segment was unaccounted for.

    The newfound materials included more than 600 kg of sandalwood oil hidden in underground storage. That alone had a market value of about ₹6 crores. Moreover, the gold that was recovered had foreign markings, the Directorate of Revenue Intelligence (DRI) was roped in for necessary investigation, said the DGGI.

    Vijay Mallya: The Story of Fame and Shame and How he defrauded banks
    Vijay Mallya, the distinguished Indian businessman and the Ex-MP (Rajya Sabha) was “The King of Good Times” until bad times rolled in. Here’s his true story!
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    Conclusion

    The perfume capital of India is famous for its perfumes, the practice dates back thousands of years. This new smell of black money stocking really stains such a great history. Piyush has been arrested and he is waiting for his trials at the court of law. As of now, he is spending time thinking about what he will do now to bail out of this situation.

    We don’t think there is much of a light left for him, as this is such a big case of black unaccounted money. Some say that this amount of money is related to political parties in Uttar Pradesh. This has also become a new political agenda where politicians play the blame game. However, This case has a lot to do with businesses and the income that they can hide successfully and illegally.

    The government has to make strict rules to make not just the perfume capital but the whole of India devoid of unaccounted money.

    FAQ

    What was the business of Piyush Jain?

    Piyush Jain was a perfume trader and he used to sell the perfume compounds to different foreign clients.

    What did Piyush Jain do?

    Piyush Jain was arrested on charges of evasion of Goods and Services Tax (GST).

  • PNB Scam: How Did Banks Lose Money in Nirav Modi Case

    Banks play an important role in the economic development of the financial sector of India. They are running a business that involves all the transactions done by every person. As banks are running a business, sometimes they earn and sometimes they lose. The very common cause of banks losing money is the inability to collect the money-back which was distributed as and if they have a concentration of loans in a particular business segment that falls in hard times, those losses are even more severe.

    In 2018, Punjab National Bank, one of India’s largest public-sector banks experienced a fraud of INR 11,400 crores at its Brady House branch located in Mumbai. The accused person was Mr Nirav Modi, a well-renowned diamond maker of India. Here’s the complete story of how the PNB scam was unfolded.

    Who is Nirav Modi?
    Nirav Modi’s Business of Luxury Diamond
    How did Nirav Modi Avail Loans from Banks?
    How Nirav Modi Operated the PNB Scam?
    FAQ

    Who is Nirav Modi?

    Nirav Modi is an Indian fugitive businessman; he is the founder of Firestar Diamond International and his uncle Mehul Choksi is the chairman of Gitanjali Group. These two companies were involved in the Diamond business and had a retail chain of 4000+ stores in India.

    Nirav was brought up in Belgium and did his early schooling at the Wharton School at the University of Pennsylvania. He came back to Mumbai and started with his family business of jewellery manufacturing.

    Nirav Modi’s Business of Luxury Diamond

    In 1999, he founded Firestar. After working for years and getting experience in the business Nirav in 2008 launched a diamond store bearing his name in New Delhi. Seeing and attracting a huge crowd he thought of opening more stores and started the 2nd store in Mumbai followed by 17 more stores. Nirav launched his stores globally with stores in New York and Hong Kong city.

    Nirav Modi Store
    Nirav Modi Store

    According to news, his company had a presence in 12 countries with 30 boutiques in 2018. Firestar is the only diamond manufacturing company in India to source the coveted Argyle pink diamonds, found only in Western Australia.

    At this time Nirav was also looking to expand its product line with more affordable pieces. He became a lot popular after designing his “Golconda Lotus Necklace” with an old, 12-carat, pear-shaped diamond as a centerpiece in the year 2010. The diamond had previously been sold in the 1960s and had to be repolished.

    Golconda Lotus Necklace
    Golconda Lotus Necklace

    Stores were running very well and were recognized as a theme of pure luxury, many Indian celebrities were doing the advertisement for Nirav Modi’s jewellery. Nirav Modi was also featured in the Forbes list of Indian Billionaires in 2013. To run such a vast and huge business globally he was always in the need of funds which he took from small public sector banks.

    How did Nirav Modi Avail Loans from Banks?

    At first, he started with a small number of loans which he was able to repay the bank within the time limit. The first fraud started in 2010 when Nirav took the loan with the help of a fake letter of undertaking issued by PNB bank at its Brady House branch. Letter of Undertaking is said to be a sort of guarantee that is issued by a banking entity to the concerned party for attaining short-term credit from the overseas branch of an Indian bank.

    How Nirav Modi Operated the PNB Scam?

    Nirav thought of this as an easy way to obtain short-term credit. He then started giving fake Lou’s to the bank and used to obtain a lump sum amount of money. Nirav managed to get 1,212 more such guarantees in the next 6-7 years.

    The Letters of Understanding were signed in favour of Indian bank branches for the one-year import of pearls, with the Reserve Bank of India’s guidelines allowing for a total of 90 days from the date of shipping. The guideline mentioned in the letters were ignored by overseas branches of Indian banks. They disregarded providing any documents or information with PNB that had been made accessible to them by the companies when they applied for loans.

    When PNB approached banks to provide a 100% cash margin, the bank argued they had availed this facility in the past as well. The transactions were never registered in the bank’s main system, leaving PNB management in the dark for years. This suspected there could be a fraud that led to them digging further into the transaction history.

    Later it was found out that PNB employees were also involved in this process of providing fraud loans. They got the commission from Nirav and used to do the job for him. PNB employees used the SWIFT network to send messages to Allahabad Bank and Axis Bank regarding financial requirements.

    At that time they found that these letters were on a fraud basis and the money was transferred to Dummy accounts of firms that were inactive in business and were acting according to the command of Nirav Modi. A total of INR 6,400 crore acquired through PNB Lou’s was transferred abroad to buy real estate and personal property through “dummy corporations.”

    Nirav Modi New York House
    Nirav Modi New York House

    All these methods were used by him to transfer the money received by these banks for business purposes and were spent on his personal use and luxury. He escaped India in January 2018 after which a warrant was issued by the CBI and Enforcement Directorate to arrest him.

    Vijay Mallya: The Story of Fame and Shame and How he defrauded banks
    Vijay Mallya, the distinguished Indian businessman and the Ex-MP (Rajya Sabha) was “The King of Good Times” until bad times rolled in. Here’s his true story!
    StartupTalkyAnik Banerjee

    Conclusion

    The PNB scam is said to be one of the biggest fraud cases in India’s banking history to date. Till now the Government authorities of India have sealed and auctioned several thousand crores worth of properties and assets of Modi. Yet the government has not been able to get money recovered in full.

    There is a need for improvement in our Indian Banking Sector and mainly a focus on providing the loans and credit facilities to the people who need them the most and who can repay without making defaults.

    FAQ

    How did Nirav Modi get loans?

    Nirav took the loan with the help of a fake letter of understanding issued by PNB bank.

    How much money did Nirav Modi borrow from the bank?

    Nirav Modi and his uncle Mehul Choksi defrauded the bank of over Rs 14,000 crore.

    In which year did Nirav Modi take the loan?

    Nirav Modi took the first loan from PNB on March 10, 2011, and later managed to get 1,212 more such guarantees over the next 74 months.

  • The Biggest Ponzi Schemes in Modern History

    There are only two ways to be successful and have a ridiculous amount of money. The first way is to do the work, put in the hours, work super hard. The second or the other way is to quickly pull out a scam, expose loopholes, thug people and earn millions in a short period of time.

    Now, which way is ethical and which way is unethical, that would be another topic for some other day. Here we are to discuss some of the most unethical ways people pulled out in history to create a ruckus. The biggest Ponzi schemes of the world.

    A Ponzi scheme is a form of fraud that is performed by a dummy organisation, built with the sole purpose to defraud people by luring them to good schemes to get the money and vanish. We will go with a list of top Ponzi schemes and numbers do mean a lot in here –  

    Madoff Investment Scandal
    MMM
    Stanford Financial Group
    Caritas (Ponzi Scheme)
    FAQ

    Madoff Investment Scandal

    Bernie Madoff
    Bernie Madoff

    There was a person named Bernie Madoff who was a popular American financier and who allegedly executed what is said to be the largest Ponzi scheme in history, defrauding thousands of investors of tens of billions of dollars over the course of 17 years, and maybe even longer.

    He was also the chairman of the Nasdaq in the early 1990s. He died in prison on April 14, 2021, while serving a 150-year sentence for money laundering, securities fraud and several other felonies. Yes, you read it right, 150 years in sentence and he died during the ongoing term.

    Bernie came up with promises of unbelievable and steady returns through an investing strategy known as split-strike conversion, which is funnily a real trading strategy.

    He simply deposited funds (from clients) into one bank account which he used to pay existing investors who wanted to cashback. He funded retrievals by attracting new investors with good capital but was unable to maintain this transaction balance when the market turned upside down in 2008.

    He admitted to his sons who worked at his firm but, he claimed later, were not aware of the scheme as of December 2008. They turned him to the authorities the very next day. The fund’s last statements indicated it had a whopping $64.8 billion in client assets.

    Vijay Mallya: The Story of Fame and Shame and How he defrauded banks
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    MMM

    Sergei Mavrodi
    Sergei Mavrodi

    Sergei Panteleevich Mavrodi with such a spell of a name was a Russian financial fraudster, supercriminal and previously a deputy of the State Duma. He was the founder of МММ, a scheme or basically a company that defrauded millions of people around the world. He was the Deputy of a state and that made him a trustworthy individual and the trust was misused.

    MMM was established in 1989 by Sergei Mavrodi, his brother Vyacheslav Mavrodi, and Olga Melnikova. The name of the company is simply the initials of the founders’ surnames.

    In the beginning, Sergei operated a network of enterprises importing computers. In 1992, tax police accused MMM of tax evasion, leading to the collapse of a subsidiary which was a bank, Suffocating the company of financial support.

    Facing difficulties in funding its foreign trade, the company jumped into the financial domain. It offered American stocks to Russian investors, but the new business was met with little success.

    The MMM Ponzi scheme was launched in February 1994, promising quite some super annual returns of up to 3000%. The company started an aggressive TV ad campaign, spending a lot of money to get to the most investors.

    The advertisement campaign appealed to the general public by using “ordinary” characters that viewers could relate to. The most popular of them was a “folk hero” of early 1994, Lyonya Golubkov.

    Another notable marketing effort was a giveaway of free Metro trips to all citizens on a certain day. That was how the scheme was popularised and landed on the plates of investors. This became the recipe for a successful scam and thugged the public.

    Stanford Financial Group

    Allen Stanford
    Allen Stanford

    The Stanford financial group was an international organisation that provided financial services. They were privately owned and the company was managed by Allen Stanford. Headquartered in Uptown Houston, Texas, it had 50 offices around the world. It was seized by the United States authorities in 2009. It was said to have managed a whopping US$8.5 billion of assets for clients that were more than 30,000 and in around 136 countries of six continents.

    On February 17, 2009, US federal guys entered the Houston offices and Law officials placed signs on the office doors stating that the company was temporarily closed, but the company was in operation but under the management of a receiver.

    The feds placed charges of fraud due to that receivership and ten days after that the U.S. The Securities and Exchange Commission amended its complaint to accuse Stanford of turning the company into a “huge Ponzi scheme“.

    Mehul Choksi – How he list the sparkle? [Case Study]
    Mehul Choksi has been wanted by the Indian authorities since 2018 after many tries he has been arrested in Dominica. Let’s understand the complete scenario.
    StartupTalkyAnagha S

    Caritas (Ponzi Scheme)

    Ioan Stoica
     Ioan Stoica

    Caritas means ‘charity’ in Latin, which is quite ironic for such a Ponzi scheme originated in Romania that was active from 1992 to 1994, that is for around two years. The company was founded by Ioan Stoica.

    It attracted millions of investors and depositors from all over the country, who invested millions of dollars in that scheme in hope of amazing returns before it finally went down or went bankrupt on the 14th of August 1994, having a debt of whooping US$450 million ($786 million in current terms).

    It covered itself wearing a blanket of “mutual-aid”. It showcased itself as an enterprise aimed at helping Romanians during the transition (Capitalism) and it lured investors with a promise of a good eight times the capital they initially invested in a matter of six months.

    Caritas prospered this scheme with the help of a relation it had with the Romanian National Unity Party (PUNR) and the mayor of Napoca, Gheorghe Funar, who helped this scheme to set up and even helped it garner good trust by renting them space in the Cluj hall, appearing with Stoica in public and on television they managed to get some trust from the general public.

    Funar even went ahead and paid for space in the local newspaper to publish a list of the chosen ones, who would see their money multiply 8 fold; the list had 44 pages per day less than a month before the Ponzi firm collapsed. It went bankrupt.

    Its bankruptcy made the Romanian government active and it searched and closed down such schemes. The government even got warnings about the scheme from several mediums, including the Intelligence Service of Romania, which wrote a report in early 1993 (which was leaked) and from the Chief Economist at the National Bank, Daniel Dăianu, who straightforwardly called it a fraud.

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    Mukund Mohan is an Indian origin Tech Executive has been sentenced for fraud obtaining over $1.8 million worth of Covid 19 disaster relief loans.
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    Conclusion

    The above article discussed some of the biggest Ponzi schemes witnessed in the world. There are surely much more other than these, some small in scale and some even wider in scale. These are people who used loopholes in their favour and even discovered them when they needed to. All this takes courage and the will to know the game well in order to steer the wheel in a Ponzi direction.

    All this shows a human character getting to the worst of creativity and shortcuts to earn quickly by defrauding the trust of millions. This is how ugly can trade happens when performed by tricksters.

    This also shows how important it is to be in the know about what’s happening around us and how to get rid of ignorance where most people live. Get to know these masterminds, learn how laws can be bent and learn how you can safeguard yourself. In a world of democratised information, ignorance should be left behind.

    FAQ

    How can you spot a Ponzi scheme?

    If the scheme offers “Guaranteed” High Returns, Consistent High Returns and has Unlicensed Sellers it might be a Ponzi scheme.

    What are some of the biggest Ponzi schemes?

    Madoff Investment Scandal, Stanford financial group, and MMM are some of the biggest Ponzi schemes.

    What is a Ponzi scheme?

    A Ponzi scheme is a form of fraud that is performed by a dummy organisation, built with the sole purpose to defraud people.

  • The Curious Case of Africrypt | How Africrypt leveraged Bitcoin popularity to operate a scam

    Cryptocurrencies have a separate fanbase that loves to mine, possess and trade in them. Ever since bitcoin, the open-source software, was released as the world’s first cryptocurrency, the era of this new form of digital currencies began.

    The craze of cryptocurrencies is nothing new and is the drive that is increasing more than ever, pushing this generation of people towards possessing more of them. And why would it not be there?

    Bitcoins and other cryptocurrencies have been well-known to offer healthy amounts of profits and with the adoption of these currencies as payment methods by organizations like Square (SQ), CashApp, Venmo, and the latest by PayPal, the cryptocurrencies are scaling new heights.

    Furthermore, these currencies are also beginning to act like safe-haven assets.

    Cryptocurrencies were relatively new in the past but with the turn of the last decade, they have been growing in popularity like never before in all the major countries of the world.

    However, this new scam involving cryptocurrency in Africa is to put legions of people around the world in doubt where the founders of the African bitcoin investment and exchange company, Africrypt, vanish into thin air along with all their investors’ money!

    What is Africrypt and How it Started?

    Africrypt is an African cryptocurrency firm founded by Raees Cajee and Ameer Cajee. This company was established in 2019 by the two brothers, aged 20 and 17 years respectively, and aimed at providing bumper returns to their investors.

    Soon after the company started its operations, it began to quote exceedingly profitable returns to its investors, which was allegedly at 10% per month. However, not a single person was to raise any questions with regards to the same until the case where the founders took flight occurred, to the shock of all of them.

    With the New Year Came New Signs of Troubles

    The investors were getting a palpable profit and that’s what helped them go further with Africrypt.

    There wasn’t a single instance where they felt insecure even amidst the pandemic, until the month of April 2021, when the company’s CEO Ameer Cajee informed the clients that the company was struck by hackers.

    He further implored them not to inform the lawyers and other legal authorities to take any steps because that would result in slowing down the recovery process of their money.

    This aroused the suspicions of many of their investors, who immediately roped in the law firm, Hanekom Attorneys along with another group to start with the liquidation against Africrypt. However, the suspicions were only meant to stay.

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    Scam Alert!

    Africrypt, which was otherwise deemed to be a profitable and reliable venture, revoked its employees‘ access to the back-end platforms. This added more panic to the anxiety that was already ripe and then, after seven days, it completely vanished untraceable along with bitcoins that are estimated to be worth around $3.6 billion.

    What’s more shocking is that there is no single trace of the firm, its founders, and all the celebrity investors who were involved in it!

    According to the recent Bloomberg report, any calls to Africrypt, where Ameer’s mobile number was on display, are being redirected to the voicemail service.

    The value of the bitcoins saw a recent surge in the past year and with the loss of 69,000 coins through Africrypt, which would have amounted to 4 billion dollars in April, would represent a huge loss, and in fact, one of the biggest cryptocurrency scams in recent times.

    Bitcoins and their traders are witnessing enormous losses and most of them in recent years are incidentally with the companies based out of South Africa. It was only in 2020 that the South African Bitcoin trading company, Mirror Trading International led to the loss of 23,000 cryptocurrencies, which amounted to around $1.2 billion and was reported as the biggest scam involving cryptocurrencies. However, with this latest Africrypt scam, losses are predicted to be three times as much.

    Looking at the Latest Proceedings

    Hanekom Attorneys, the Cape Town-based law firm that the investors approached fearing the hack, initially worked for the liquidation against the company. However, as the case took a new turn after the disappearance of the founders of Africrypt, they were unable to locate the brothers but have already informed other crypto exchanges requesting a quick revert in case they make any attempts to convert the digital coins.

    Furthermore, Hanekom has further escalated the matter to the Hawks, an elite branch of the South African police force.

    According to the reports, the coins with which the company has vanished were untraceable because Africrypt has already transferred its share of pooled funds to tumblers and mixers or other large pools of bitcoin.  

    While the founding brothers’ mobile phones and other numbers are being redirected to the voicemails, calls seem to be pouring in on the phone number of the cousin of the Cajee brothers, Zakira Laher, who was also a former fellow director of Africrypt. The investors, police as well as the media are seemingly calling her for updates regarding the scam.

    Laher, who has a week-old baby at their residence, is scared of the situation that the brothers left their family in and is exceedingly worried about the safety of her family. Speaking about the position that she used to hold at Africrypt, Zakaria mentioned that her designation was peripheral and she didn’t gain anything out of the same.

    The Story of Adani Scam – Full Case Study
    Adani Group is not just a name, it is one of the most popular brands from Indiathat enjoys a towering reputation amongst the companies hailing from thesubcontinent. Adani Group was founded by Gautam Adani back in 1988 in Ahmedabad,Gujarat. Starting initially as a commodity trading business with i…
    StartupTalkyAnik Banerjee

    Why is the Investigation of Cryptocurrencies Difficult?

    Though the investigation is in progress, nothing is yet to come out that disclosed any whereabouts of the founders of Africrypt or the money lost. It is quite difficult to run an investigation involving cryptocurrencies even when it comes to a scam as colossal as the present case of Africrypt.

    Brandon Topham, head of the Finance Sector Conduct Authority of South Africa said that the cryptocurrency assets are still not considered legal as financial products by the government, which is why they cannot launch a formal investigation for the same.

    Conclusion

    The cryptocurrency market has huge potential for the future, however, the road to success with these digital currencies is also fraught with frauds and losses. Besides, the latest rise in the prices of digital currencies ushered in a whole new world of risks.

    With China announcing the latest ban on cryptocurrencies after their prices soared recently, it appears to be adding to the list of other countries like Bolivia, Algeria, Morocco, Saudi Arabia, making the future murkier for these currencies.

    FAQ

    Who are the founders of Africrypt?

    Africrypt was founded by two brothers Raees Cajee and Ameer Cajee.

    When was Africrypt founded?

    Africrypt was founded in 2019 aimed at providing huge returns to their investors .

    Did Africrypt founders left the company?

    The founders of the company vanished with bitcoins that are estimated to be worth around $3.6 billion.

  • The Story of Adani Scam – Full Case Study

    Adani Group is not just a name, it is one of the most popular brands from India that enjoys a towering reputation amongst the companies hailing from the subcontinent. Adani Group was founded by Gautam Adani back in 1988 in Ahmedabad, Gujarat. Starting initially as a commodity trading business with its flagship company Adani Enterprises Limited, the group has grown to a multinational conglomerate of high repute.

    Gautam Adani’s brand now boasts of an annual revenue of over US$ 13 billion and exercises its operations across 70 locations in 50 countries. Furthermore, Adani Group is also famous for being India’s largest port developer and operator, having around ten ports and terminals under its wing that includes Mundra Port, its largest.

    With the help of the promising services that Adani Group has delivered throughout the years and the growth that the company has witnessed, the president of Adani Foundation, Gautam Adani has scaled up the ladder to become the second richest person in Asia.

    However, the success story of Gautam Adani and the brand he built seems to be on unstable grounds lately after NSDL froze three main FPI accounts that have funded the organization.

    What happened to Adani Group?
    When did it happen?
    What happened as a result of the freeze on Adani’s Foreign Funds?
    Why were Adani’s FPIs frozen?
    What did Sucheta Dalal tweet and why did it become a sensation?
    FAQ

    What happened to Adani Group?

    According to the latest reports, National Securities Depository Limited (NSDL) froze three of the primary foreign funds of the group namely, Albula Investment Fund, Cresta Fund, and APMS Investment Fund. All of these companies are apparently registered in Port Louis, Mauritius, with Albula and APMS sharing the exact same address in Mauritius. These three funds together own shares worth Rs 43,500 crores of the four companies listed under the parent organization.

    When did it happen?

    Though it was only on June 14, Monday that news made to the headlines of almost all the major media channels and websites as per the depository’s website, these accounts were frozen on or before May 31.

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    What happened as a result of the freeze on Adani’s Foreign Funds?

    As soon as the FPI accounts worth Rs 43,500 crores were seized by NSDL on Monday, June 14, 2021, the shares of Adani started to decline. The shares of Adani Enterprises witnessed a 24.99 % drop and were valued at Rs 1,201.10, whereas Adani Ports and Special Economic Zone tanked by 18.75 % to be valued at Rs 681.50 on the BSE.

    Adani Enterprises share Price
    Adani Enterprises Share Price

    Why were Adani’s FPIs frozen?

    It is apparent that the shares of Adani fell as an obvious result of the freezing of the company’s foreign funds but the reason that led to the freeze is still wrapped in mystery.

    According to some of the top officials at custodian banks and law firms, the freeze came as a result of insufficient disclosure of information regarding beneficial ownership as per the Prevention of Money Laundering Act (PMLA).

    SEBI had reformed the know your customer (KYC) documentation required for FPIs as per PMLA in 2019. For the existing funds, SEBI granted them time till 2020, post which they needed to comply with the new norm and failing that will result in freezing their Demat accounts, which might be the case with Adani Group.

    Furthermore, SEBI is also reported to be investigating the stocks of Adani Group, which have gained between 200% and 1000% in the past year, in order to check if there was a price manipulation in them or not. The probe was initiated in 2020, sources said, while SEBI denied mentioning anything else on that matter.

    The new rules of the revamped KYC documentation for FPIs included that they need to submit some additional details that will contain the disclosures on common ownership and personal details of the chief employees of the fund like fund managers.

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    What did Sucheta Dalal tweet and Why did it become a sensation?

    Though the actual reason behind the recent drop of Adani can somewhat be traced to the freezing of the primary foreign funds of the company, Sucheta Dalal’s recent tweet, though cryptic in nature, seems to visibly coincide with the falling of Adani shares. Soon after which the netizens from all around the country and abroad started to take great interest in that matter, which resulted in flooding Twitter and Facebook with a world of posts, tweets, and memes.

    Here’s the tweet that Sucheta posted:


    Sucheta Dalal resorted to anonymity but there were clear indications that it pointed to SEBI’s ongoing investigations of the Adani Group, its FPIs, and the sudden rise of its stock prices. The prices of the stocks of Adani went down in less than two days after Dalal’s tweet, which instantly caught the attention of the netizens and resulted in these memes:

    Some memes from Twitter:




    Sucheta Dalal’s tweet that coincided with the recent move of the stock market was also compared to that of Elon Musk’s tweet, which pulled down the cryptocurrency industry last month. This incident has also earned Dalal, the Padma Shri awarded journalist, who was famous for her contributions on the Harshad Mehta scam, Enron scam, the Industrial Development Bank of India scam, and more, the title of “Elon Musk of Indian stock market” on popular social media platforms.

    FAQ

    Who is Adani?

    Gautam Adani is an Indian billionaire industrialist and philanthropist who is the chairman and founder of the Adani Group, his estimated net worth is 7,080 crores USD.

    What companies does Adani own?

    Gautam Adani owns Adani Enterprises, Adani Ports & SEZ, Adani Green Energy, Adani Power, Adani Transmission and Adani Total Gas.

    What is the Net worth of Gautam Adani?

    The net worth of Gautam Adani is estimated to be around 7,080 crores USD.

  • The Revival of Punjab-Maharashtra Co-operative Bank

    PMC bank became the talk of the town when it issued an EoI (expression of interest) in order to identify suitable equity investors/group of investors to take over management control and revival of its current state. The EoI was issued in November 2020 and has to be submitted to the RBI by December 15.

    The Scam

    PMC has been under regulatory restrictions since RBI found irregularities in its financial operations and hiding and facilitating loans to Housing Development Infrastructure Limited (HDIL). Rs. 6200 crore have been exposed to HDIL in this matter. In 2019, Economic Offences Wing (Eow) of the Mumbai police, arrested PMC’s former managing director Joy Thomas in connection with the fraud. The promoters of HDIL, Rakesh Wadhawan and Sarang Wadhawan, too have been arrested and are currently in jail, facing money laundering charges.

    RBI found financial irregularities in its transactions and imposed regulatory restrictions

    PMC’s total deposits sum up close to Rs 10,800 crore, advances up to Rs 4500 crore, and gross non performing assets of Rs 3500 crore as on 31st March 2020. The bank has a share capital of Rs 293 crore but registered a loss of Rs 6800 crore during the year 2019-20. It has a negative net worth of Rs 5800 crore.

    The Revival

    In a letter to the bank’s customers and stakeholders, RBI appointed administrator  A K Dixit said that the bank has already rolled out various steps in order to recover from its current state. Recovery of bad debts, cutting costs and expenses, rationalizing several branches are a few of the steps taken on the revival front. Essential IT systems are being retained, staff expenses are being kept under a strict check and various means are being found to console the stakeholders and especially the depositors.

    RBI kept a strict check on its costs and expenses

    The administration stated that the bank is currently rolling out Rs 1 Lakh to all its depositors. Other than that, hardship payments of Rs 5 lakh are being made to those with Critical or life-threatening ailments like Cancer, Covid-19, ailments related to heart, kidney etc.

    A particular development has been observed during the revival process that 20 percent of the bank’s nine lakh customers haven’t withdrawn the entire sum of Rs 1 lakh. It looks like a silver lining in the days of doom as there are a few customers that believe that the bank is going to make it through this mess.

    Required Investment

    Potential investors have proposed to convert PMC bank into a small financing bank but first, it will have to meet the regulations and an approval by the RBI. The administration is reviewing several options of investments for bringing the bank back to life.

    RBI is looking for potential investors for the bank’s revival

    Currently, with a negative net worth, the bank will need Rs 5800 crore to bring back the net worth to zero and another 1000 crore to maintain the adequacy ratio of 9 percent to restart the business.

    Further proceedings

    Administrator will weigh pros and cons for each investor and give recommendations to RBI

    Initially, four entities had shown interest in investing but only three entities have submitted their interest in the revival of PMC so far. Mumbai based Surindar Mohan Arora (Ideal Group) is understood to have submitted the LoI (letter of intent). Identities of other entities have not yet been ascertained. The last date for submitting the LoI was December 15 2020. An extension has been granted and the investors have been given February 1, 2021 as the final date to submit their final offer. The RBI administrator A K Dixit will be studying the plus and minuses of all the Letters of intent. After their recommendations, RBI will take a call on which entity is suitable for taking over the management control and commencing day to day operations of the bank.

  • Why has the Paytm App Been Taken Down From Google Play Store

    The Paytm app has been removed from the Google Play Store for violating policies related to unregulated gambling apps. According to CNBC – TV18, Google had notified the developers by releasing a statement on September 18th regarding this issue. Google said that, “we don’t allow online unregulated gambling apps that facilitate sports betting.”  Google also mentioned that the app leads to consumers to an external website that’s allows them to participate in the paid tournaments to win real money/cash prizes.

    That being said this might not affect people that have already installed the app on the phones, but will affect the company as google will not be allowing any more new downloads. The app is to stay out of the platform until the developers bring the app into compliance. However if they are any more repeated policy violations, google has decide to take even more serious action which may include  terminating google play developer accounts.

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    The online betting scam

    The Enforcement Directorate has discovered an online betting scam that involved Chinese nationals that have used online wallets such as Paytm, Cashfree and Razorpay.  It has also frozen Rs 46.96 crore in four bank accounts after raiding 15 locations across Delhi, Gurgoan, Mumbai and Pune after companies were found to be running  some illegal online betting apps linked to China. During the course of the search ED in 2019, the accounts of Dokypay Technology Pvt Ltd were mostly found in the HSBC bank.

    These accounts have seen a collection of Rs 1,268 crore out of which Rs 300 crore came via Paytm payment gateway and around Rs 600 crore was transferred out via Paytm payment gateway. It has also been found that the locals were hired in order to open these bank accounts with the HSBC bank and then open trade these accounts with online wallets namely Paytm, Cashfree, Razorpay, etc.


    Further a network of agents were hired to attract new customers /members, referral codes were then sent privately to invite the new members. These online wallets had lax due to diligent mechanisms and their non-reporting of suspicious transaction to the regulatory authorities helped the accused companies to launch pan India activities. And Paytm app being taken out of the google play store was the result of this situation.

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    The affect on Paytm First Games


    This also comes as a huge blow for Paytm as it was also planning to launch Paytm First Games on the 19th September. Paytm First Games is an Indian Digital payments leader’s platform into the fantasy game segment and had also made Sachin Tendulkar as its brand ambassador. The app had aimed to get over 100 million users during the upcoming Indian Premier League and had planned over 200 live events on the platform over the time range of six months.

    Paytm Response To This


    When asked about this decision, the CEO of Paytm Vijay Shekhar said that companies like Facebook and Google have the responsibility to hep the growth of Indian Startups and the ecosystem. He also added that he thought Google was acting like the judge, jury and executioner because it has the power to remove apps from the App store.

    Paytm had earlier put out their official statement, in which they stated that they observed google has been using its policies, rules and regulations selectively allowing a few large companies like Paytm First Games to distribute and list their respective  Real money gaming apps on play store, without any action, hindrance by google  play store and supporting this unfair trade and practices.

    The statement also included that FIFS took this matter up and reached out to google to protest against this unfair trade practice. Paytm also has insisted that is a level playing field is not re-establishes , we may be forced to seek any other advice including legal action. Promotion of MPL in times portfolio companies including Cricket Buzz, Gana, MX player has also been stopped. And ended it by saying that they were confident and will be able to convince them to allow all our member apps on the Play Store.

    The Current Situation

    Later on in the day, Paytm has successfully managed come back on Google play store as CEO of Paytm Vijay Shekhar, Tweeted saying that “Thanks everyone for your support! Paytm App is back, live in Play Store. We launched a UPI CashBack campaign this morning. Our app got suspended by Google for this. India, you decide if giving cash back is gambling.