INDIA. Mumbai: It has been a harrowing wait for over 300 investors who entrusted nearly Rs 7.50 crore in the ill-fated “Portfolio Management Scheme,” operated by a group of Mumbai-based firms spearheaded by Parleshwar Finance.
These investors find themselves still yearning for the return of their hard-earned money, a plight that has persisted for almost two decades.
The entities in question, Parleshwar Finance and Investment Services Pvt. Ltd, Parleshwar Finance (purportedly a Partnership Firm), Arthvardhan (purportedly a Partnership Firm), and Unity Investment Society (purportedly a Partnership Firm), all located in Vile Parle East in North West Mumbai, introduced several savings and deposit schemes during the nineties.
Operated under the umbrella of ‘Parleshwar Finance and Investment Services Pvt. Ltd,’ one such scheme, the “Portfolio Management Scheme,” was initiated around 1988. It enticed investors with an initially alluring 14% interest rate, drawing in a considerable number of depositors.
During the initial years, the company upheld its end of the bargain, ensuring timely interest payments and the return of deposits upon maturity.
However, a cloud of irregularities loomed over the firm, as it became apparent that the company and its associated entities were not registered as Non-Banking Finance Companies (NBFC) with the Reserve Bank of India (RBI), despite claiming that the registration process was pending.
The RBI took a pivotal step on June 28, 2004, when it rejected ‘Parleshwar’s’ application for registration, invoking its authority under section 45 of the RBI Act, 1934, thereby prohibiting the operation of a non-banking financial institution.
As troubles mounted, the management resorted to diverting investors’ funds towards lending to small entrepreneurs, leading to significant unrecoverable losses. This financial debacle resulted in defaults in interest payments and the refund of deposits upon maturity.
Subsequently, the aggrieved investors initiated legal proceedings, lodging FIRs with Vile Parle Police Station and the Economic Offences Wing of the Crime Branch of Mumbai Police.
Legal petitions were filed with the MPID Court, Bombay High Court, and the Supreme Court, all seeking relief under the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999.
In the ensuing period, directors and partners of the implicated firms found themselves behind bars due to the filed FIRs.
Some of the assets belonging to these entities and the personal properties of their directors and partners were seized by various authorities under court directives. Reports also emerged of certain assets being clandestinely sold with the assistance of local individuals.
Today, the deceived and disheartened investors are left in a state of despair, with the legal battle reaching a near-standstill across various courts.
The once-operational company has been shuttered, and over time, many investors have grown old or sadly passed away. Those still seeking recompense find themselves navigating a never-ending legal labyrinth, with little hope on the horizon.
The prolonged and unfortunate saga of the Parleshwar Finance investors serves as a stark reminder of the enduring consequences of financial deception and underscores the need for vigilant regulation and investor protection in the financial sector.
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