Police arrest 10 in Chakra Gold scam

Published: 07th July 2013 09:23 AM  |   Last Updated: 07th July 2013 09:23 AM   |  A+A-

In a major breakthrough, the police arrested 10 of 14 accused in the multi-crore financial scam by Sri Chakra Gold Farms and Villas (India) Limited, in Visakhapatnam Saturday. The scam came to light on June 10, when some investors ransacked the company office after the management failed to pay the monthly installments.

The company management reportedly showcased their farm lands as a guarantee for the money invested by their customers. It reportedly promised four times the amount invested. Several people invested amounts ranging from `1 lakh to `5 lakh. Growing suspicious in the wake of recent chit fund scams, a few investors met the management demanding repayment of their investments in January. However, the management reportedly threatened the investors that they would close down the company if they force them to repay the money.

On receiving a complaint from the investors, police busted the management of Sri Chakra Gold Farms and Villas (India) Limited. As per the company’s Memorandum of Association (MOA) and Articles of Association (AOA), the company should run as a real estate company and  it does not have a permission from the SEBI, to run such investment schemes. It also does not have permission from the RBI to raise deposits.

Police commissioner B Shivadhar Reddy said that the company management collected deposits of `15.18 crore from about 32,000 customers in about 25 branches spread across AP and Bellary of Karnataka, under the guise of real estate.

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