Pune Share Trading Scam: Proprietor Arrested as Investors Lose Rs 4.5 Crore

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Pune, 18th November 2023: In the third economic fraud within the city in the past fortnight, at least 11 investors have been swindled of Rs4.5 crore by a Warje-based share trading company from December 2021 to the present date.

The Pune police have arrested the company’s proprietor and share broker, Niranjan Shah (42), though the masterminds behind the preceding two scams remain at large.

The common modus operandi 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 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 duped 90 investors of Rs3.39 crore between September 2021 and October 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 Rs5.12 crore between February and October this year. The company 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 revealed, “We arrested Shah following a complaint from a 41-year-old furniture businessman from Indapur in rural Pune. The complainant invested Rs3.1 lakh, and more complaints are expected from the businessman’s relatives and friends who invested varied amounts with Shah.”

The complainant, lured 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, in his defense, 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.