SFIO to investigate City Fraud scam

FRAUD OFFICE TO PROBE CITY GROUP SCAM

http://www.financialexpress.com/news/Fraud-office-to-probe-City-Group-scam/599660/

New Delhi: The ministry of corporate affairs will refer the investigations into the alleged Rs 1,000-crore fraud by the Mumbai-based City Group of Companies to the Serious Fraud Investigation Office (SFIO). The City Group of Companies, which deals in vehicle leasing and fleet management and certain other hospitality services under companies like City Limouzines, City Realcom, City Communications, is charged with duping 25,000 investors who had invested in its various schemes promising high returns. City Limouzines was the official sponsor of India’s women’s hockey team from 2006 to 2009.

The MCA has already asked the registrar of companies in Mumbai to examine the matter. The economic offences wing of the Mumbai crime branch also formed a special investigative team in December last year to look into the case.

According to an MCA official, the group had mobilised deposits by promising impressive returns. But the cheques issued by it to investors started bouncing since August 2009. There were also allegations that the group had diverted sizeable chunks of the amount raised in Bollywood films.

According to MCA officials, group companies like City Limouzines attracted investors by asking for a minimum investment of Rs 139,000 with a promise that the investor would get a monthly return of Rs 7,775 over a period of five years.

An email sent to the company’s spokesperson and calls made to the company went unanswered.