COIMBATORE: A special court for Tamil Nadu Protection of Interests of Depositors (TNPID) Act cases in Coimbatore on Friday sentenced two directors of Paazee Forex Trading (India) Private Ltd to 27 years of jail and slapped a fine of Rs 171.54 crore on them for cheating thousands of investors of nearly Rs 1,000 crore. Judge AS Ravi in his ruling said the fine amount shall be handed over to a competent authority to be distributed to all depositors proportionately as compensation.
Faulting the CBI for filing a final report in which it said Rs 930.71 crore was collected from 58,571 depositors — without examining all the depositors and recording their statements, the court directed the agency to give the complete list of depositors and total due to the accused and produce it before the court within a month.
According to the CBI charge sheet, K Kathiravan, his son K Mohanraj and Kamalavalli Arumugam of Tirupur district had jointly floated two partnership firms Paazee Trading Inc and Paazee Marketing Company and incorporated Paazee Forex Trading India Private Ltd.
Probe in event of more plaints in scam, CBI told
The accused had also operated a website www.paazeemarketing.com and had allegedly mobilised deposits and investments promising to deploy them in forex trading and had assured investors of high dividends within a short period of time.
In 2009, people who had invested funds in these firms filed police complaints saying that they have been defrauded. Based on the complaints, a case was registered by the Tiruppur District Crime Branch on September 24, 2009, against six entities, including three firms, and the three directors were arrested. The accused went underground after getting anticipatory bail in 2009.
The case was then transferred to the CBI, and the Economic Offences Wing (EOW) of the central agency arrested the three directors from a hideout in the Northeast. The accused were booked under Section 4 of the Prize Chits and Money Circulation Scheme (Banning) Act, Section 5 of the TNTNPID Act and IPC Sections 420 and 120 (b). They were later enlarged on bail. Further, one of the accused, Kathiravan, passed away in 2021.
In its final report, the CBI had recorded the statements of 1,402 depositors as witnesses and a final charge sheet was filed before the court on October 7, 2011. The trial was going on at the special court for nine years, and arguments were completed in February this year. Meanwhile, the HC rejected prime accused Mohanraj’s plea seeking compounding of offence. The judge on Friday also directed the CBI to initiate further proceedings if more investors come forward with complaints.