In a significant legal development, a special court in Chennai has handed a 20-year prison sentence to R. Subramanian, the promoter of the retail venture Subhiksha. Subramanian, an alumnus of IIT and a graduate from IIM, faced the conviction for defrauding investors by duping them and diverting their investments through various shell companies.
The court found Subramanian guilty under the Tamil Nadu Protection of Interests of Depositors (in financial establishments) Act (TNPID Act). According to the judgment, he and his accomplices collected deposits through various schemes, including Prime Invest, Asset Backed Security Bond, Liquid Plus, and Safety Plus. The accused deceived depositors by enticing them to invest and later failed to return the matured amounts, resulting in cheating the depositors.
Viswapriya India Ltd, Subramanian’s first business venture launched in 1991, attracted several investors. Despite admitting to defaulting on over Rs 137 crore to depositors and not depositing any amount for the past 10 years, 587 affected investors are still awaiting compensation.
The court imposed a fine of Rs 8.92 crore on Subramanian and a fine of Rs 191.98 crore on the convicted entities, with Rs 180 crore earmarked for compensating depositors. The compensation amount will be transferred to a competent authority for distribution after verifying the documents of the affected investors.
