Adityaraj Capital case: Ponzi-style scheme suspected, 7000 duped

Belagavi: Preliminary investigations into Adityaraj Capital Private Limited have revealed an alleged pyramid or Ponzi-style investment scheme that attracted 6,500–7,000 investors across multiple states and mobilised funds running into hundreds of crores by promising assured monthly returns of five per cent.

Assistant commissioner Shravan Nayak had raided the company office Thursday.

Addressing a joint press conference Saturday evening, deputy commissioner Mohammad Roshan and commissioner of police Bhushan Borase said the company aggressively lured investors through meetings, seminars and promotional campaigns, offering guaranteed monthly returns backed by written agreements.

Officials said the firm operated on two fronts—mobilising public funds and offering investment opportunities—but failed to adequately inform investors about associated risks. Instead, they were enticed with unusually high and assured returns, a key red flag.

Investigators found that investors were made to sign leverage funding agreements with lock-in periods but without proper risk disclosures. Officials said such arrangements fall under the Karnataka Protection of Interest of Depositors (KPID) Act.

The company claimed the funds would be invested in stock market trading. However, officials said no individual or entity can legally guarantee fixed returns from market-linked investments. The firm was not registered with the Securities and Exchange Board of India (SEBI) as a portfolio manager.

Prima facie, the operation resembles a pyramid scheme where funds collected from new investors are used to pay returns to earlier investors, stated the deputy commissioner and police commissioner, adding that such models invariably collapse.

Investigators said investors were issued promissory notes and post-dated cheques, now being treated as documentary evidence. The company allegedly misrepresented its financial viability and failed to disclose how funds were deployed.

Further inquiries showed the firm was neither registered with the Reserve Bank of India (RBI) as a non-banking financial company (NBFC) nor authorised by SEBI to collect public deposits or offer such investment products. Authorities also suspect destruction of digital records, with cyber police tasked to retrieve transaction trails.

The company’s office in Bhagyanagar has been sealed, and a case has been registered at Tilakwadi Police Station under provisions of the Banning of Unregulated Deposit Schemes (BUDS) Act and the KPID Act. The FIR names the company, its associate entities, founder and CEO Balaraj Mane, and others.

Officials said the alleged fraud exceeds Rs 50 crore and the case is likely to be transferred to the criminal investigation department (CID). Investigations are ongoing.