How 28-year-old Anandhu Krishnan took Keralites for a Rs 1000 crore half-price ride
It is said to be an around Rs 1000-crore scam and has the whole of Kerala agog. The unlikely mastermind is a suave and at the same time 'believable' 28-year-old, who had positioned himself as a social activist.
Claiming to be on a mission to empower people and drawing upon the gullibility of the common folk, he baited them using Corporate Social Responsibility funds as a ruse and siphoned off their hard-earned money allegedly with the help of multiple NGOs and high-profile individuals, said to range from politicians to even a retired High Court judge.
When the scam unravelled, it emerged that what Anandhu Krishnan (28) of Kadayathoor village in Thodupuzha, Idukki district was running was a sophisticated Ponzi operation.
The modus operandi of the 28-year-old suspect was simple: He claimed big companies were funding his scheme to empower people through their CSR funds. This enabled him to offer scooters, laptops, sewing machines and home appliances at half the price, he claimed.
Initially, the promises materialised.
As the net spread wider, thousands more were lured and bought into the scheme before the cold realisation dawned on a hot Kerala day that they were but mere prey.
A top police source told The New Indian Express that the scam really took off after promises of delivering scooters at half the price were made. Anandhu initially collected half the cost of scooters from around 40,000 customers, delivering scooters to about 18,000 of them.
The same soon happened with laptops and household appliances.
Anandhu posed for photos with celebrities, politicians and government officials adding a further air of legitimacy as his 'scheme' flourished.
When the scam came to light, the alleged involvement of many prominent names surfaced.
The list of those under a cloud now includes the Sri Sathya Sai Orphanage Trust founder and executive director KN Anandakumar, Indian Union Muslim League (IUML) MLA Najeeb Kanthapuram, retired High Court judge Ramachandran Nair and Congress leader Laly Vincent.
Each passing day brings to light more details on what is being considered one of Kerala's largest financial scams.
The investigation into the case has been handed over to the state crime branch. The current probe team plans to record statements from everyone involved, including customers who either received or failed to receive the promised goods at half the price.
A speculation doing the rounds is that a national agency like the Enforcement Directorate (ED) might take over the probe soon.
How the scam unfolded
The scam came to light following a complaint by Muvattupuzha resident Jumana Nasar to the Chief Minister.
The Chief Minister's Office sought detailed information from the Muvattupuzha police, leading to an investigation headed by Inspector Basil Thomas, with Sub-Inspector PC Jayakumar and team, uncovering the fraud.
Interestingly, Jumana had not lost any money herself but filed the complaint in public interest, seeking transparency in the half-price scheme.
During the investigation, the Muvattupuzha police initially froze a current account belonging to Anandu's company, Professional Services Innovation, at HDFC Bank's Ernakulam branch, which held Rs 3.5 crore. Further transactions into the account were also blocked.
It soon emerged that Anandhu had swindled many more crores while forming 'welfare societies' across Kerala.
Anandhu, it came to light, had established the Muvattupuzha Socio-Economic Development Society, and he collected over Rs 7 crore from its members, claiming the funds were being used to purchase scooters under CSR schemes from various companies.
Further investigation revealed that Anandhu had formed 62 seed societies across the state and had been employing the same fraudulent method since 2022.
As the police followed the trail, the true extent of the scam hit home, exposing a fraudulent operation worth crores of rupees.
How the scam operated
As per the probe team, Anandhu, the mastermind behind the scam, influenced NGOs lured by the promise of CSR funding.
He rolled out schemes for the purchase of scooters, home appliances, laptops, fertilizers, water tanks, water purifiers, and sewing machines at half the price through these societies.
Initially, he delivered vehicles and home appliances to a few customers to build credibility, and then launched extensive advertisement and promotional campaigns to attract more buyers. However, he eventually diverted the funds collected to finance a lavish lifestyle and acquire properties.
"The scam largely revolved around promises of scooters at half price. The accused reportedly collected half the cost of scooters from around 40,000 customers but delivered scooters to only about 18,000 of them. Similarly, in the case of laptops, he collected money from roughly 30,000 customers but delivered laptops to only half of them. For fertilizers, only a portion of the customers who paid advances received the promised goods," said a top police source.
A fraudster from his school days
Anandhu Krishnan's fraudulent journey began during his teenage years, while he was still an SSLC student under the age of 18.
At that time, he focused on mushroom cultivation, conducting classes on the subject to gain visibility. Through these activities, he connected with a former Women’s Commission member, initially as her assistant in mushroom farming.
This eventually led to him becoming a trusted member of her personal staff, giving him access to a wider social network and bringing him in touch political representatives.
It was during this period that Anandhu was implicated in a case involving the alleged fraudulent sale of a tea plantation, which was linked to a BJP woman leader.
"During interrogation following his arrest in the half-price scam, Anandhu disclosed that before launching the scam, he had attempted another fraud under a scheme by the Ministry of Micro, Small, and Medium Enterprises (MSME). The scheme offered subsidies for sewing units through NGOs. However, he abandoned this plan when the central government discontinued the scheme. He later devised the half-price scam under the pretext of CSR funds being made available," said a police officer from the probe team who wished to remain anonymous.
The officer added that although Anandhu claimed to have approached several companies for CSR fund approvals, he failed to provide any proof that showed such attempts were made.
What the preliminary investigation suggests
The preliminary investigation in the scam suggests that no CSR funds were available and the scheme purely ran using the money that was collected.
"The accused collected money from the customers and used it to settle payments to dealers and dealerships for products. For instance, funds from two customers were often used to fulfill a single product purchase, allowing him to offer goods at half price to early members," said a police source, speaking on condition of anonymity.
The probe team is now looking into the involvement of high-profile names, especially political party leaders in the scam, considering the enormity of it.
In the initial stages, the probe team believed Anandhu had acted alone, and succeeded in boosting the popularity of his 'scheme' by using his photos with hotshots.
But the revelations made by Anandhu during investigation that he had a close association with the Sri Sathya Sai Orphanage Trust Executive Director KN Anandakumar has convinced the probe team that bigger names could have been involved.
Adding to this, Anandhu himself has alleged that prominent individuals and political figures were involved in the operation. He claimed to have given money to members of various political parties as he was being escorted to his offices and flats for evidence collection. However, when pressed for specific names, Anandhu refrained from divulging details, offering only a half smile in response.
The Bee that buzzed for Anandhu
As per police sources, Anandhu established numerous fraudulent companies and associations to pull off his scams.
The key entity was Social Bee Ventures, a Limited Liability Partnership (LLP) based in Girinagar, Kochi. This company was actively operational during the height of the half-price scam but shut operations after Anandhu's arrest.
The official records reveals that the company had an operating capital of just Rs 1 lakh, but transacted crores of rupees.
What the Half-price scam reveals about Keralites
Financial experts agree that scams like the half-price scheme are fueled by a widespread tendency among Keralites to seek discounts or even freebies.
"The total financial loss suffered by the public and the full scope of the scam are still being uncovered. What we know now is just the tip of the iceberg," said Nikhil Gopalakrishnan, CEO of Pentad Securities, a Kochi-based stock brokerage firm.
According to Gopalakrishnan, scams operating under the pretence of being driven by Corporate Social Responsibility (CSR) funds have been around for years. Many individuals are drawn to these schemes, lured by the belief that large sums of money can be obtained from the CSR funds of listed companies.
"Most people, especially the general public, lack awareness about CSR funds, their legalities, and the formal procedures for allocation," he added.
With countless stung by this latest scam, will Keralites learn to be on their guard? Well, we all know the answer to that, now don't we?