Fraudster Founder Faces Sentence | IIT-IIM-Educated Subhiksha Founder Faces 20-Year Sentence for Investor Fraud | Short Review

IIT, IIM-Educated Subhiksha Founder Faces 20-Year Sentence for Investor Fraud

Fraudster Founder Faces Sentence | IIT-IIM-Educated Subhiksha Founder Faces 20-Year Sentence for Investor Fraud 

Introduction :  The Conviction : 

Renowned engineer and IIT Madras alumnus, R Subramanian, the founder of Subhiksha, has been sentenced to a 20-year prison term for defrauding investors. 

The court order on November 20, 2023, reveals Subramanian's conviction by a special court in Chennai, which found him guilty of diverting funds through various shell companies.

Deceptive Schemes Unveiled : 

Under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, the court convicted Subramanian and his associates for soliciting deposits through four schemes: 

Prime Invest, Asset Backed Security Bond, Liquid Plus, and Safety Plus, sponsored by A1 M/s. Viswapriya India Ltd. 

These schemes misled investors into reinvesting matured amounts, promising substantial short-term gains but ultimately failing to return the funds.

Subramanian's Business Ventures : 

Viswapriya, Subramanian's first business venture founded in 1991, marked his entry into the financial services sector. In 1997, he launched Subhiksha. 

Despite the initial success, Viswapriya left 587 investors uncompensated, with Subramanian confessing to defaulting on over Rs 137 crore across all programs.

Financial Penalties : 

The court imposed fines of Rs 8.92 crore on Subramanian and Rs 191.98 crore on the convicted entities. 

A significant portion of Rs 180 crore is allocated for depositor compensation. Per the court's directive, these funds are to be transferred to an authorized entity, ensuring equitable distribution after validating affected investors' documentation.

Conclusion : 

In conclusion, Subramanian's IIT and IIM education did not shield him from the legal consequences of his actions. 

The conviction underlines the importance of transparency and accountability in financial dealings, serving as a cautionary tale for potential investors. 

The court's penalties, including substantial fines and compensations, aim to rectify the harm caused to the deceived depositors.

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