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‘All My Life Savings Gone’: Ponzi Scheme Uproots 18 Lakh Lives

“Will fight for our life savings”, say investors of a Ponzi scheme allegedly worth Rs 7,500 crores. 

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Camera: Ankita Sinha
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When 62-year-old Ranjana Rana decided to invest her life savings in 2011, her neighbours suggested she try out the refundable holiday scheme investment opportunity that a company called Citrus Check Inns provided. Without waiting any further, Rana and her family invested over Rs 5 lakh in fixed deposits in the company over a period of three years. But when Rana tried to collect her maturity amount, she was in for a shock.

“I was told they won’t be able to return my money. Not just me, even my neighbours, friends, no one was getting their money. How will I survive without my money? That money was my only livelihood. I am a widow, even my son is no more. How will I pay for my medicines? The doctor’s asked me to undergo angiography right away and this would cost about Rs 2 lakhs. I have gone into depression, I can’t sleep because of this tension, how will I afford this?
Ranjana Rana, Investor
Ranjana Rana is hoping she gets her Rs 5 lakhs back.
(Photo: The Quint/Ankita Sinha)

Like Rana, 18 lakh investors have been duped of around Rs 7,500 crores after they invested in the same Ponzi scheme.

In 2008, a company called Royal Twinkle Star floated a refundable holiday investment scheme. Here, people could invest their money as recurring deposits or fixed deposits and receive an interest of over 13 percent on the amount. Investors were allegedly assured that their money would double upon maturity. But in 2012, investors who did not receive their maturity amount complained to Securities and Exchange Board of India about it. SEBI then ordered the directors of the company to refund investors’ money and put an end to the scheme.

Duped investors have come together to form the ‘Citrus Welfare Society’ to fight for their money.
(Photo: The Quint/Ankita Sinha)
My family invested Rs 57 lakhs in Royal Twinkle. We were getting 13 percent interest on the amount quarterly or half yearly. That was regular, but the problem started when the company had to return the maturity amount. I had left my job in Dubai and deposited my savings in the scheme and I was surviving on the interest. I hope I at least get back my principal amount now.
Ramesh Poplay, Investor

SEBI’s clampdown didn’t stop the directors of Royal Twinkle from starting another company in 2012 – Citrus Check Inns Limited, and floating a similar scheme again. Once complaints of fraud started pouring in against Citrus Check Inns Ltd. as well, SEBI barred the second investment scheme as well. The investors then approached the National Companies Law Tribunal (NCLT). Here, the two companies agreed to issue a No Objection Certificate liquidating their assets to repay the investors.

But shockingly, documents produced before the NCLT show that the company’s project asset is only worth Rs 3,555 crores while the principal liability is around Rs 4,700 crores and total liability is around Rs 7,500 crores.

What we are asking, not even taking the Rs 7,500 crores into account is, you collected an amount of Rs 4,700 crores, which is a fact and you have an asset worth Rs 3,500 cores. So you are lacking around Rs 1,000 crores. Where is the Rs 1,000 crores? How are you going to pay back. They are saying they will liquidate their assets but the assets are not enough to wipe out even their principal amount debts.
Rahul Gaikwad, Advocate 

With the matter’s now being heard in the Supreme Court, chairman of the two companies, Omprakash Goenka insisted that the total liability of his company is around Rs 4,600.

While speaking to The Quint, Goenka assured that he and his company are committed to returning the principal amount in installments and said the reason for the delay in returning the amount was due to the devaluation of his real estate assets over the last few years.

Rs 7,500 crores is the wrong number, this has never been the figure. If we count interest also, it will work out to Rs 5,000 odd crores. The total liability of the company collectively is around Rs 4,600 crores. This is the principal amount and against that, as per NCLT order, we have voluntarily surrendered assets worth Rs 3,555 crores. This value has been arrived at after the assessment of the fair market value in today’s distressed market and I’m sure that in a couple of years when the assets will be realised and the payment will be met, this figure will go up and we will be in a position to pay 100 percent of the principal amount.
Omprakash Goenka, Chairman & MD of Citrus Check Inns Ltd 
Neelam Mahakar had been investing in fixed and recurring deposits in the two schemes since 2009.
(Photo: The Quint/Ankita Sinha)

Despite these assurances, for investors like 45-year-old Neelam Mahakar, the cost of delay is too high. “The maturity should have happened in 2016-2017 but I haven’t received a single rupee. I owe debt worth Rs 4 lakhs, how will I clear this? I couldn’t collect my daughter’s hall ticket in February as I didn’t have money to pay her fees. I had invested all my money in the scheme. I have been investing Rs 7.5 lakh since 2009”, said Neelam.

I really needed this money for my daughter’s wedding. I wrote them a letter and requested them but there was nothing. Out of the Rs 25 lakhs I invested, this company hasn’t even given me Rs 25,000 back.
Priya Jadhav, Investor

33-year-old Umesh Mane invested his mother’s and his own life savings worth Rs 14 lakhs in Royal Twinkle Star Limited’s scheme. Nearly two years after the maturity date, Umesh is losing hope of ever getting his money back.

Umesh Mane invested his mother’s and his own savings in Citrus Check Inns Limited.
(Photo: The Quint/Ankita Sinha)
My mother was a domestic help and I do odd jobs. We had invested all our money into this scheme and now it’s all gone. I thought with the returns, I would buy a small house and get married but now none of that is happening. There’s so much tension at home.
Umesh Mane, Investor

Out of 59 branches opened by the two companies, only the one in Mumbai’s Borivali hasn’t drawn shutters yet. Investors can often be seen queuing up outside the office to enquire about their hard earned money.

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