Indian Ponzi Promoter Commits Suicide Over Pressure From Jilted Investors
An Indian woman tasked with raising funds for what was revealed to be a $15 million Ponzi scheme has reportedly committed suicide after demands from disgruntled investors apparently became overwhelming. According to police, Manorama Haidar, 32, was found hanging at her home in the West-Bengal town of Basuldanga. The death is the latest in a series of suicides and even one murder resulting from an aggressive government crackdown on so-called "chit fund" Ponzi schemes that targeted lower-class Indian citizens seeking higher returns on their savings. The largest scheme, the Saradha Group, is estimated to have duped hundreds of thousands of Indian investors out of billions of dollars.
Haidar acted as an agent for Basil International Limited ("Basil"), which offered redeemable preference shares that carried purported annual returns ranging from 11% - 14%. Basil utilized a wide network of agents to solicit potential investors, fanning out over remote areas to draw in typically lower-income investors that generally had a lack of finance knowledge. The company is also alleged to have used television advertisements to reach potential investors, and eventually raised close to $15 million.
However, an investigation conducted by the Securities Exchange Board of India ("SEBI") found that the company was using investor funds for a variety of unauthorized purposes, including the payment of huge commission to its agents, investing in business operations, and general misappropriation of funds. In May, SEBI issued an order forbidding Basil from raising any future funds from investors, and directed the company not to dispose of any company assets or divert any funds in the company's possession.
In addition to investing approximately $13,000 of her own money, Haidar also raised more than $50,000 from numerous investors who thought their funds were safe with Basil. After SEBI issued the order shuttung down the company, investors reportedly began pressuring Haidar for the return of their funds.