Investors allege returns stopped after two months; say size of fraud is Rs150 crore
Innovative Studio Private Limited (ISPL) at Bidadi on the Mysore-Bangalore highway is in the dock for allegedly cheating investors to the tune of Rs150 crore after promising high returns.
Following an advertisement from the company, around 150 investors from India and abroad made huge investments three years ago; now they are running from pillar to post to get their money back. The cheques investors received from the company bounced due to insufficient funds.
“When we approached Saravana Prasad, ISPL’s chairman and managing director, he not only refused to return our money, but threatened us with dire consequences,” Nafis Fathima, an investor who sold her house for investing in the company, said.
Disappointed with Prasad’s approach, the investors formed Innovative Film Studio Investors Association (IFSIA) and approached city police commissioner Jyotiprakash Mirji, who asked the HAL police to investigate.
According to a complaint filed by IFSIA, Prasad had advertised inviting investment for a commercial block created at the studio. He offered to rent out commercial area in the studio for `3,600 per sq ft with `36 per sq ft on every month as guaranteed rental.
Prasad assured that the invested money would be used for the construction of malls, business centres and an amusement park, and the investors would get high rental returns. He also assured that he would attract foreign direct investment (FDI) for the venture after which the returns will be doubled to Rs 76 per sq ft per month.
Anticipating good returns, around 150 investors signed up, but the company allegedly stopped paying after two months. “The problem started from the third month as Prasad started avoiding calls and dodging our queries,” Fathima said.
After waiting for a few months, the investors confronted Prasad, forcing him to issue cheques. “But the cheques bounced,” another investor, who did not want to be named, said.
“All our hard earned money is not only blocked but we have been facing a financial crisis for the last three years,” another investor said.
“We demanded the police that the case be handed over to Central Crime Branch (CCB) for a detailed investigation,” he added.
Refuting IFSIA’s allegations, Prasad said he never signed an agreement with investors and promised monthly returns. “They are retail purchasers of the property which the company has registered in their name. Now after four years they started harassing us without any prior notice or having any related documents,” he claimed. “The company would take necessary legal action against the people who are taking advantage of this issue,” Prasad added.
The HAL police have taken up the case. “We are trying to ascertain the facts before pursuing further,” HAL police inspector C Balakrishna told DNA. ISPL was in news in 2010 when J Somashekhar, a partner of the studio, approached Adugodi police seeking protection. Somashekhar allegedly received calls from underworld don Ravi Poojary asking him to settle the dispute with his business partner.
Ravi Poojary allegedly warned Somashekhar that he and family members would be killed if the matter was not settled. The case is pending with Adugodi police and investigations are on.
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