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Nirav Modi, Vijay Mallya aren't only fraudsters to have fled India; RTI shows 184 others on loose: Exclusive report

It appears Nirav Modi and Vijay Mallya are not the only fraudsters who have successfully managed to flee the country. Since 2015, there are hundreds of cases of financial scams registered with the Economic Offences Wing (EOW), Mumbai. According to information obtained by activist Jeetendra Ghadge through RTI request, 184 of the people accused in those scams are absconding.

In 2015, 105 cases were registered with the EOW. The number was at 119 in 2016, and in 2017, it was 109. Out of which, 73 cases of 2015 remain under investigation. As many as 103 from 2016 and 107 cases from 2017 are still under investigation.

The EOW usually looks into high-profile swindlers because it investigates scams only over Rs 50 lakh. The total amount involved in cases for last three years are: Rs 5,560 crore in 2015, Rs 4,273 crore in 2016, and in 2017, it is 9,835 crore. In all, it is a whopping Rs 19,668 crore in three years. However, the refund investors have received from EOW stands at an abysmal Rs 2.5 crore among 74 investors.

File image of Nirav Modi. Nirav Modi official Facebook page

File image of Nirav Modi. Nirav Modi official Facebook page

The scams here mostly concern ponzi schemes, where large sums of money are taken for nonexistent projects. Typically, the operator initially pays a handsome dividend to the investors to lure them into investing more. Those returns are paid through the money invested by others instead of the profit earned by the concerned investor.

In December 2017, the Serious Fraud Investigation Office (SFIO) took up investigations into 63 companies for illegal pooling of money, or ponzi schemes, reported The Times of India. “The count of such companies being referred to the white collar crime probe agency is also the highest in the last three financial years, according to data available with the corporate affairs ministry,” the report read.

Devidas Tuljapurkar, former joint secretary of the All India Bank Employees Association, said such schemes thrive on the hurry of the common people to get rich. “In India, there is a considerable section of the society that is still not financially educated,” he said. “People are gullible, and want to get rich quick. And scamsters exploit that sentiment. The reason why there is no prompt investigation is that it is easy to manage things in India.”

Ghadge said the main reason behind sluggish investigations is “the political intervention, corruption, short staff and lack of expert officers who can investigate complex financial frauds.” The same RTI information notes there are 79 vacant posts of PSI in the EOW.

"There seems to be a tsunami of financial fraud in this country mainly because these fraudsters have no fear of the law,” said Ghadge. “With some political influence and by bribing officials, an accused can easily get away. We cannot blame the EOW or CBI, the government is ultimately responsible for not fixing the law and order machinery.”

Updated Date: Mar 04, 2018 22:49 PM

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