Financial firm officials flee with Rs 500 crore

Vizag-based investment firm SIMS closes down, one depositor ends life, investors stage protests

Published: 17th February 2013 08:47 AM  |   Last Updated: 17th February 2013 08:47 AM   |  A+A-

A city-based investment firm which collected deposits worth hundreds of crores from the public by offering high returns closed down its offices in the city and other places in the district triggering a wave of angry protests on Saturday by shattered investors, one of whom reportedly committed suicide unable to digest the loss.

The amount raised by the management of Secured Investment Making Services (SIMS) India Pvt Ltd, in what is being termed as the biggest ever multi-crore investment scam in coastal Andhra, is being put at Rs 500 cr by many. The police sources, however, claimed the money collected from the public could be around Rs200 cr.

K Rambabu (40), a investor from Anakapalle town, committed suicide by jumping in front of a speeding train at the town railway station after the news came to light on Saturday. Rambabu is learnt to have deposited `4 lakh, which he saved for the marriage of one of his two daughters, after being lured by high interest offered by SIMS.

Several investors descended at SIMS offices in Anakapalle and Narsipatnam towns on Friday to collect the promised returns but soon they realised that they had been duped. They staged protests and ransacked the offices of the company leading to tension. On Saturday, the news spread like wildfire and hundreds of investors turned up at the company offices in Visakhapatnam, Anakapalle, Narsipatnam, Yelamanchili and other places in the district.

SIMS is a direct marketing company founded by Surendra Gupta and others in 2009 with its head office in Akkayyapalem.

They collected crores of rupees from the people in the region promising them hefty returns. On Saturday, a few employees and agents of the company were manhandled by the investors before the police intervened and rescued them. The Anakapalle police registered a case against the company management on Friday and another case was registered by the Fourth Town police in Visakhapatnam city on Saturday as complaints poured in.

An advocate, Sastry, claiming to be the representative of the company directors met police commissioner B Shivadhar Reddy and said the company needed to clear arrears to the tune of Rs 85 crore. He reportedly claimed that the company has assets worth over Rs 155 crore and sought some time for repayment of the money. However, the police commissioner is learnt to have reprimanded the company management for illegally collecting the investments and asked the advocate to ensure that the company directors surrender themselves immediately. Sources said four of the six directors, including Surendra Gupta who hails from Hyderabad, are absconding. Two directors, Satyanarayana Reddy and Srinivas, are learnt to be in the police custody but the police denied it.

The family members of another director Jaggarao were ‘house-arrested’ by the investors at Thatichetlapalem before the police came to their rescue.

DCP (law and order) P Viswaprasad has been entrusted with the investigation of the case.

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