Vashi2Panvel.com: Small Investors: Sep 12,

Vashi2Panvel.com: Navi Mumbai: Sept 12: “If more businesses like bsldiary.com remain in operation, soon there won’t be any need for banks, either because they would provide 100% interest and leave no need for the banks to operate or that people would be left with no money to invest in banks after going through ordeals like mine,” says an anguished investor in the bsldiary.com business. In one of the biggest frauds in recent times, absconding Chairman of Busybiz Network Solutions (P) Ltd, Babu Varghese has amassed a staggering amount of Rs 75 crores by showing more than one lakh investors some fantastic dreams. Varghese and 17 of his aides are still at large while 4 have been arrested. The main business of the company, with its office in Cochin was bsldiary.com, a kind of multilevel marketing of software, internet space etc. but soon, it converted its business into money marketing. Within a short period of one year (2003-2004), the company persuaded more than one lakh innocent people to enter their “Network” and invest huge money. Varghese promised commission and profit in return. Says M. Iyer (name changed), “I didn’t invest blindly in this scheme. In one of the lavish seminar–dinners, Babu Varghese showed me legal documents regarding the registration of the company. They also used to cut TDS from our weekly commissions. So I thought my money is safe” The sum, he promised, would be doubled in 52 weeks with the investors receiving weekly payments. Initially, the business ran smoothly and became very popular, making people re-invest their savings. Arimbur Ignatius, secretary of Maharashtra Investors’ Action Council, says, “We used to get weekly returns of Rs 600 on investing Rs 15,500. This continued till February 2004. After that Varghese started complaining about server problems. Since he had taken us into confidence, we believed him.” But their trust was soon to be belied. Babu Varghese simply vanished and so did 21 of his associates, with a whooping sum of Rs 75 crore taken from people in Mumbai, Thane, Navi Mumbai, Kalyan and Dombivali areas.

Says Ignatius, “The investors are mostly innocent housewives and retired people. Most of the investments were life long savings and money from voluntary retirement. They were answerable to so many down-lines that they had to even sell off their property and ornaments.” Byculla resident Shaheen Mazhar, wife of a taxi driver, is answerable to 189 members and owes them Rs 7.5 lakh. ‘‘I was attacked with knives,’’ she shudders. A lady doctor who lost Rs 4.5 lakhs rues, “My husband and children don’t live with me now. Varghese broke my family.” Hopes of getting back the money have now been revived with the Maharashtra Investors Action Council, formed by 72,000 victims solely for this purpose, filing a PIL on August 10, 2005 in the HC for a CBI probe in the fraud case, with support from Maharashtra Law Graduates Association, an NGO. The MIAC has been in action since July 2004. An FIR was registered then against Busybiz under section 406,420,120-B and 34 of the Indian Penal Code. The Crime Branch of Mumbai, has till date, sealed property belonging to the accused worth Rs 10 crore and arrested 4 of Varghese’s close aides including his brother. “The problem was not just losing our own money. We are answerable not only to our down-lines but to people whom we don’t even know. The Network had developed do much. I now receive harassing and threatening calls from people who are not under me at all. How am I responsible for their loss? Haven’t I lost money too?” asks a schoolteacher who wishes to remain unnamed.

The matter is now pending in three courts, the Metropolitan Magistrate Court in Esplanade, Mumbai, the Sessions Court in Thane and the Magistrate Court in CBD-Belapur. “We just hope that we get back our money. But it is always difficult and complicated in courts. If they want evidence, then let them come to my place and see my condition,” says the teacher.

How they were fooled
Say you invested Rs 1,500 in a fixed deposit (FD) scheme that promised returns at the rate of 7.5 per cent per annum. You will earn an interest of Rs 112. In Varghese’s scheme, you would get an interest of Rs 580
Invest Rs 15,500 in the same FD scheme, you will earn an interest of Rs 1,162. Varghese promised Rs 14,140