THRISSUR : Even amid allegations of goods and services tax (GST) evasion against Highrich Online Shoppe Pvt Ltd, a report submitted by Cherpu police to the 3rd Additional District Sessions Court says fraud involving the company could amount to Rs 1,630 crore, based on preliminary calculations. It indicated that not even a single complaint had been received against Highrich officials and that the company’s claim of having around 1.63 crore global customers was fictitious.
It alleged that the company, under the cover of marketing groceries through supermarkets, was involved in running a pyramid-scheme based multilevel marketing chain.
A person could register on the company’s online platform and buy products using vouchers for either Rs 700 or Rs 10,000. When one with a company ID gets another to join the chain, then the former gets a commission of Rs 100 for a Rs 700 purchase and Rs 1,000 for a Rs 10,000 purchase made by the latter. Each chain could extend to 18 links and commissions were credited to bank accounts on a weekly basis.
Police questioned an investor who had created several IDs by himself and was pocketing all the commissions for the lakhs in purchases he alone made. A company agent, in a statement, said he had created 39 IDs and bought a Rs 10,000 voucher for each and enlisted 6,000 members. Police clarified that it was not 6,000 people who were enlisted but 6,000 new IDs. The actual number of people involved needs to be reviewed.
Consequently, according to the report, the company’s claim that it had a customer base of 1.63 crore was found to be false. In actuality, 1.63 crore IDs had been created through its platform. Highrich’s ‘Crypto’ and OTT platforms would also need to be investigated extensively and that would take time, it said. The company also claimed to have more than 12 lakh customers on its HR OTT platform, which seemed to have attracted a mere 10,000 views. Police also traced 20 bank accounts of the company. Presently, these accounts remain frozen on orders issued by the district collector under the BUDS Act.
The Highrich scam has the potential to be one of the largest financial frauds reported in Kerala, and ascertaining its extent would require an elaborate investigation, police said. According to the report, all the company’s transactions were carried out through its online platform and that it not possess any property. The godowns near Arattupuzha were not owned by the company, but were rented, it found.