Thursday, October 6, 2011

Mangalmurti Autolink fraud investment

The dust has barely settled on the Pramod Agrawal episode when another investment firm has set up shop in the city and is offering incredibly fabulous returns. Coincidentally, it has a business model similar to the infamous City Limouzines of Mumbai which went bust a couple of years ago with its promoter arrested and leaving scores of investors in the lurch.

Chartered accountant Agarwal had promised to double money in two and a half years and is now behind bars. A few months ago, another city firm M/s Om Sainath which was doing similar business had wound up its affairs.

The new scheme in the city is being offered by Mangalmurti Autolink Private Limited which has an office at Sadar. A minimum investment of Rs 81,000 fetches a monthly payout of Rs 9,667 for a year. This comes to Rs 11,6004 - a whopping 43% returns in just 12 months. The investible amount ranges up to Rs 3,39,000 on which a monthly payout of Rs 40,456 is made. Those at Mangalmurti say that the money is invested in the car hire business the company runs and the payouts are a share in the profits it earns.

However, investors complain that the company has already begun facing problems in making the monthly payments. The payouts due since November were paid towards the end of January while that of January is still pending. Sources close to its affairs say, Mangalmurti has 125 investors in Nagpur and if Rs 81,000 is considered as the amount put in by them, the total investment comes to Rs 101,25,000.

The company has 18 branches with each having around 100 customers on an average. "The total funds gathered in the country could be over Rs 14 crore. The firm has branches in cities like Jalgaon, Nashik, Solapur, Hyderabad apart from Mumbai. There are reports that payment crisis has hit all centres barring Mumbai," said sources.

An official in Mumbai identifying himself as Sandeep Gaur said the company has a standing of 10 years in the business and caters to the corporate sector apart from deploying its vehicles at airports. It operates a stand by the name of Silver Cab in Nagpur airport too.

Gaur said the firm has 8500 taxis deployed in its 18 branches raking in a yearly turnover of Rs 10 crore, while the monthly payout to all the investors is much lesser. "An Indica car itself generates a daily business of Rs 2,500 so you can calculate turnover with all the cars," he said. He refused to divulge exact details on the profit earned by the company.

However, calculations on the basis of the data in the firm's brochures shows that with the minimum monthly payout of Rs 9667 the company must be shelling out at least Rs 12 lakh to its 125 investors in the city each month. There are 18 such branches with an average investor base of 100. This amounts to a monthly payout of Rs 1.7 crore in a month.

"With such a quantum of payout, the yearly turnover will be too less for the firm to honour its commitments," pointed out an investor on the condition of anonymity. "Even if a conservative estimate of 70 investors in each branch is taken, the monthly payout comes to around Rs 1.2 crore."

On the reason for delay in payment, Vidya, another official in Mangalmurti's Mumbai office, said it was because the company had shifted to national electronic fund transfer (NEFT) system and had asked the investors to return the postdated cheques given to them. Financial experts however, say it does not take more than 10 days to get the NEFT facility.

Financial experts advise that investor should be rather cautious about such schemes. "Returns of 43% a year defy any logic. Returns on any business without one's involvement cannot exceed 20%-24% and such a high rate indeed out of question," said Kailash Jogani a chartered accountant and former secretary of Nagpur Chamber of Commerce Limited (NCCL).

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