Agrigold scam

Agrigold scam

1. By, AMBA-41 AMBA-42 AMBA-43 AMBA-44 AMBA-45 AgriGold

2. Contents: Introduction What is AgriGold scam? Action taken by government Actions By Enforcement Directorate Overview Conclusion

3. Introduction : The company was set up in 1995 as a Collective Investment Scheme (CIS). Chairman - Avva Venkata Rama Rao Agents were recruited for Marketing the company and convincing the people about the investment interests of the company. A.V.Rama Rao

4. Deposits were collected from different sections of people promising them higher investments. The collected deposits were then invested in Real estate , Entertainment fields, Milk Dairies and plantations. 1995-2014: By 2014, the company spread across seven stated in India reaching 3 Million Investors. It amassed around 16000 acres spread across different states and has 500 Crores in Commercial banks.

5. What is Agrigold Scam? AgriGold scam created widespread panic and distress among the depositors as many of them deposited their entire life savings with the company with the hope of getting a high-interest rate. It is a story that involves several thousand crore rupees and many states including Telangana, Andhra Pradesh, Tamil Nadu and Karnataka . 3.2 million people were duped in total. In 2014, people started complaining that the cheques issued by the company bounced at different banks. (At the end of investigation it was estimated that Cheques amounting 700 Cores have bounced at the banks) Cases were registered against the Chairman.

6. Upon investigating, Police found that Company is neither registered with RBI nor with SEBI. Due to its sheer scale of money involved, AP government transferred the case to AP CID. In 2016, Chairman Av Rama Rao and directors Sheshu Venkata Ramana and Hemasundara Prasad out of eighteen accused, six were arrested and others are yet to be nabbed.

7. AP government passed a GO (Government Order) attaching all the properties of the company. After completion of Investigation CID department found that company had 16000 acres, 82204 Square yards of area in AP, 2.5KG of Gold, 7.5 Lakhs in cash and 54 four wheelers. High Court, on receiving a PIL (Public Interest Litigation), directed the government to auction the properties immediately .

8. Out of 1.9 Million investors, 1.3 Million people invested below 20000 amounting to 1180 Crores .

9. Corporate Governance Failure The organisation invested the depositors money in personal business. Agrigold has allegedly defrauded about 32 lakh people to the tune of Rs 6,380 crore. Depositors' money was diverted by Agrigold to other businesses by forming over 170 shell companies. Some of these companies were setup abroad and large amounts of funds were diverted to these off-shore entities The promoters’ names also figured in Paradise Leaks and they had incorporated companies with the help of Mossack Fonsenca  - a  Panama-based Law firm in Cayman Islands A V Rama Rao and his family members siphoned off the money and illegally diverted the public deposits, and invested in countless other private companies directly owned by their family members. Investments were made in various sectors including power infrastructure, entertainment, food industry, travel agencies, chemicals, insurance, data processing, timber, software and other sectors.