CBI to probe financial fraud case

COIMBATORE: The Central Bureau of Investigation (CBI) on Tuesday took charge of Paazee case in which over 10,000 investors from 12 states were cheated of Rs 215 crore by a Tirupur-based finance company. The case was transferred to the CBI from the Economic Offences Wing of the state police.
K Kathiravan, 61, an ex-reporter with a Tamil daily in Tirupur and his son K Mohanraj, 30, started Paazee Forex Trading Firm in 2008.A Kamalavalli, a Chennai-based woman, joined as managing director and the firm appointed agents across Tamil Nadu.
The agents charged a 15% commission on every deposit. Those who deposited Rs 50,000 for 185 or 210 days were promised payments in six installments of Rs 13,500. The firm assured that after six months or one year, depositors will get their capital amount back.
But investors found that the company had duped them. The Tirupur Central Crime Branch (CCB) police registered a case against the managing directors of the firm on September 24, 2009. However, the MDs of the company obtained anticipatory bail from the Madras high court on October 8, 2009, after assuring the court that they will return the deposits.
Meanwhile, former deputy superintendent of police of Tirupur Rajendran and two inspectors V Mohanraj and E Shanmugiah allegedly received bribes for putting the case in cold storage. While all three have been suspended, one of the inspectors, Mohanraj, was arrested. The case was transferred to Economic Offence Wing (EOW), Coimbatore from Tirupur CCB in April 2010.
The EOW moved the HC to cancel the anticipatory bail of the directors. After the anticipatory bail was cancelled, the accused moved a revision petition. The Supreme Court dismissed the bail petition on September 21, 2010. Following the court order, all three managing directors allegedly absconded. Their bank accounts have been frozen.
The Paazee Forex Trading Firm had informed the HC that it had Rs 100 crore stashed away in various banks in Singapore. EOW officials and Tamil Nadu police officials approached the ministry of home affairs to get the money back from Singapore. The ministry has ordered the police to approach the Singapore government through the court. On May 13, 2011, the CB-CID police approached International Police Co-ordination Cell (IPCC), New Delhi, to inform the attorney general of Singapore to get back the money.
EOW officials said the directors of the company had invested money in 13 countries including USA, UK, Nigeria, Cyprus, Panama, British Virgin Island, Turkey and Singapore. "We have frozen 50 bank accounts of the directors in India and we have found some bank accounts from other countries too," EOW officials said. The EOW has attached properties worth Rs 3 crore and insurance policies worth Rs 2.60 crore.