KOCHI : The malfeasance involving Highrich Online Shoppe Pvt Ltd has now taken on national significance with the police investigation revealing the money chain firm received investments from other states. The scam is now believed to be worth over Rs 3,141 crore. The Enforcement Directorate (ED), which is probing the money laundering angle, on Wednesday issued a lookout notice against managing director K D Prathapan and his wife Sreena, CEO of the company.
The investigation by Thrissur Cherpu police station revealed violations under the Prize Chits and Money Circulation Schemes (Banning) Act, and assets of the firm were attached.
In reply to a question by Ernakulam MLA T J Vinod in the assembly, Chief Minister Pinarayi Vijayan said the the probe is on. “The investigation has revealed that approximately Rs 3141,33,91,800 was collected by Highrich as investment from the public,” the CM said on Monday.
Pinarayi said the company received investments from other states. “The investigation was extended to other countries. But no evidence has emerged in this regard. However, money transactions from other states came to light,” he said, adding the government has currently no plans to refer the case to the CBI.
ED issued the lookout notice to prevent Prathapan and Sreena from leaving the country. Both absconded right before agency sleuths reached their home for a recent raid. The duo have approached the Prevention of Money Laundering Act (PMLA) court in Kochi for anticipatory bail. The petition will be considered on Saturday. The ED, after analysing documents seized in the raid, maintained that Highrich collected Rs 1,157 crore from investors. It also held that the fraud would be one of the largest in the state.
In a report filed before the PMLA court on Tuesday, the central agency listed out 19 cases registered against Prathapan around the state. In three cases registered by Thrissur East police station in 2011, he was convicted under the Prize Chits and Money Circulation (Banning) Act in 2014.
“Before starting Highrich, Prathapan ran another money chain firm called Greenco Securities in Thrissur. There were 15 cases registered against Prathapan and Greenco. He was convicted and jailed. He started Highrich after being released from jail. There are currently five cases registered against Highrich and we have received more complaints from various police stations,” an officer with Cherpu station said. Initially, Cherpu police estimated that Highrich, under the guise of its online shopping operations, HR OTT and HR Coin, had cheated investors of Rs 1,693 crore.
How Highrich operated
As part of its money chain operation, the company rolled out digital coupons. The coupons could be bought for either Rs 700 or Rs 10,000. By adding more people to the chain, investors received a commission. Money collected was mostly utilised for redistribution to members as incentive/commission in typical Ponzi scheme format. The rest of the money was siphoned off as profit by the company and its promoters. Highrich also collected money under the guise of investment in its OTT platform, HR OTT, by offering high returns. While the company claimed that over 10 lakh people had subscribed to its OTT platform, only 10,000 watched its content. Company was also engaged in promoting and trading in cryptocurrencies. Under the scheme, customers investing in its HR Coin were issued tokens, which the firm said could be used to trade on its exchange. Despite the company receiving crores of rupees by offering high interest, no trading took place, it has been revealed.