IIM, IIT alumnus and Subhiksha promoter sentenced to 20 years for defrauding investors

A special court in Chennai has handed out a 20-year prison sentence to R Subramanian, the promoter of retail venture Subhiksha

R. Subramanian, the promoter of the retail venture Subhiksha, an alumnus of IIT and a graduate from IIM, has been sentenced to 20 years in prison for defrauding investors. The order copy, dated November 20, 2023, reveals that Subramanian, a gold medalist engineer from IIT Madras, was convicted by a special court in Chennai for duping hundreds of investors and diverting their investments through various shell companies.

The court found Subramanian and his accomplices guilty under the Tamil Nadu Protection of Interests of Depositors (in financial establishments) Act (TNPID Act). According to the judgment, Subramanian and others collected deposits through four schemes promoted by A1 M/s. Viswapriya India Ltd, namely Prime Invest, Asset Backed Security Bond, Liquid Plus, and Safety Plus. The accused deceived depositors, enticing them to invest in the financial establishment. Upon maturity, they again deceived depositors, convincing them to reinvest the matured amount in new schemes promising high short-term returns. The accused failed to return the matured amount, resulting in cheating the depositors.

Viswapriya, a financial services company launched in May 1991, was Subramanian's first business venture. Subsequently, he started Subhiksha in 1997. Various schemes offered by Viswapriya attracted several investors, and 587 affected investors are still awaiting compensation. Subramanian admitted to defaulting on over Rs 137 crore to depositors of all schemes and has not voluntarily deposited any amount for the past 10 years.

The court has imposed a fine of Rs 8.92 crore on Subramanian and a fine of Rs 191.98 crore on the convicted entities. Out of this, Rs 180 crore is earmarked for compensating depositors. The compensation amount is to be transferred to a competent authority, which will distribute it after verifying the documents of the affected investors, as per the court's order.