HYDERABAD: The Cyberabad Economic Offences Wing on Tuesday busted a financial racket run by a Noida-based MLM firm eBIZ.com that had reportedly cheated more than 17 lakh people by selling them products and siphoning off over Rs 5,000 crore.
The police told the media that the director Pawan Malhan, who claims to be a Canadian citizen, and his son Hitikh were taken into custody and deposits worth Rs 398 crore were frozen in their multiple bank accounts. The two were produced before the court on Tuesday.
Apart from freezing the deposits, the police also sealed the firm located in a multi-storied building on 500 square yards at Noida's posh locality.
While Pawan Malhan, a doctorate from IIT-Delhi held a position in the UGC till 2003, his son who's a law graduate served as the legal advisor of their company.
Cyberabad police commissioner VC Sajjanar said the operations of the group were rampant in Hyderabad, Bangalore, Chennai and States of Jammu and Kashmir, Delhi, Uttar Pradesh, Maharashtra, Karnataka, Tamil Nadu and Goa.
The incident came to light after a city-based student was cheated by them.
“We once again appeal to the public not to fall prey to such money circulation schemes which are being promoted under different names, targeting women, retired persons, students and unemployed youth. The products are just a camouflage but the real motive is operating Money Circulation Schemes which are banned in India,” he said.
So far, four cases have been registered against eBiz.com Pvt. Ltd in Cyberabad limits and there are at least 12 cases in several other states including Telangana and Andhra Pradesh. Enforcement Directorate has also registered a case against the group and initiated a probe, based on the cases registered by Cyberabad police.
Inquiries revealed that Pawan Malhan floated the group in 2001 in Noida and soon spread its operations all over the country. While he holds 99 per cent of the shares in the group, 1 per cent of shares are on his daughter’s name. His wife Anitha Malhan is also serving as a director in the company. Pawan started his career with MLM business through a Canada-based group Skybiz and soon became a lead earner. Following this, he was also appointed as its director. He then quit Skybiz and floated his own business in India.
Initially, they started by selling holiday packages and other products, and later graduated to education packages mostly targeting students who are in their final year of graduation or engineering or have just completed their degrees.