Pune 'Share Trading Scam': Fraudulent company swindles investors of Rs 4.5 crore

In the third economic fraud to hit Pune within the past fortnight, a Warje-based share trading company has allegedly swindled at least 11 investors of Rs 4.5 crore from December 2021 to the present date. The Pune police have taken action, arresting the company's proprietor and share broker, Niranjan Shah (42), although the masterminds behind the two preceding scams are still at large.

The pattern across all three cases involved making unrealistic promises of high returns on investment, followed by the abrupt closure of offices or claims of substantial losses in the share trading business. This latest incident closely mirrors the previous two frauds, leaving investors grappling with significant financial losses.

On November 1, the Pune police's economic offences wing (EOW) registered a case against an investment company with offices in Kharadi and Mumbai. The company allegedly duped 90 investors of Rs 3.39 crore between September 2021 and October of this year. Two individuals associated with this company were already under investigation by the Cantonment police. Subsequently, on November 8, the EOW registered another case against a Bibvewadi-based share trading company accused of defrauding seven investors of a total of Rs 5.12 crore between February and October of this year. The company allegedly enticed investors with promises of 10-14% monthly returns but ceased payments after the initial two months.

In the recent case, EOW's assistant inspector Sandeep Khandagle stated, “We arrested Shah following a complaint from a 41-year-old furniture businessman from Indapur in rural Pune. The complainant invested Rs 3.1 lakh, and more complaints are expected from the businessman’s relatives and friends who invested varied amounts with Shah.” The complainant, attracted by Shah’s reputed success in the share business over the past seven to eight years, invested in two of Shah’s firms but failed to receive the promised returns after a few months. Despite multiple meetings with Shah, promises to repay the interest were unfulfilled, prompting the investors to file a complaint with the EOW. A case has been registered under sections 420, 406, and 409 of the Indian Penal Code, along with the Maharashtra Protection of Interest of Depositors (MPID) Act at the Warje Malwadi police station.

Shah, defending himself, claimed possession of a Shop Act license for running the share business but cited substantial losses in the share market as the reason for non-payment to investors. Deputy Commissioner of Police (EOW) Srinivas Ghadge emphasized the importance of verifying the credentials of share brokers to mitigate investment risks. He warned against falling for assurances of high returns and urged victims to approach the police when efforts to recover their money prove futile.