Mumbai jewelry chain's Ponzi scheme dupes thousands
What's the story
A Mumbai-based jewelry chain, Torres, is being investigated for allegedly duping investors in a Ponzi scheme. The company, which has six stores in and around Mumbai, has now shifted the blame on its CEO and other staff members. They are accused of masterminding the fraud and looting the stores. Since Monday, investors have been gathering at Torres's Dadar store demanding refunds.
Legal proceedings
Legal action initiated against Torres and its executives
Legal action has been taken against Torres's parent company Platinum Hern Private Limited, its directors, CEO, general manager, and a store in-charge. They have been booked for cheating and criminal conspiracy. The scheme was launched in February last year with gemstone jewelry sale with a bonus offer. Investors who invested ₹1 lakh got a pendant with moissanite stone worth ₹10,000—later discovered to be fake.
Scheme fallout
Scheme details and investor reactions
Investors were initially promised a 6% return on their investment over 52 weeks, which was later increased to 11%. However, payouts stopped two months ago. Most of the investors belong to the lower middle class, including vegetable sellers and small traders. The investments varied from thousands to crores of rupees with seven complainants reporting a collective investment of over ₹13 crore.
Company response
Torres blames CEO for orchestrating fraud
In a recent video, Torres announced an 11% interest rate for investments made before January 5, with a decrease expected afterward. The company also encouraged cash payments by offering an additional 0.5% interest. But on Monday, the stores were shut as investors realized they had been scammed. Amid the chaos, Torres's official YouTube account released a video alleging its CEO and other staff members were behind this scam.
Evidence disclosure
Torres releases video evidence of alleged fraud
The video released by Torres shows people vandalizing stores and stealing money, whom he describes as "accomplices" of the CEO and other staff members. It also alleges that they had been planning this fraudulent scheme for months before roping in other employees in their crime. CCTV footage reportedly shows about 100 people breaking into jewelry cases and safes to steal money. Torres claims to have provided this evidence to police authorities.