Nagpur: In a blow to thousands of investors, the Nagpur Bench of the Bombay High Court has disposed of a petition asking for an investigation by the Serious Fraud Investigation Office (SFIO) into Prashant Waskankar and his company, Wasankar Wealth Management Limited (WWML), which is accused of huge financial fraud and duping of investors in Nagpur and other parts of the state to the tune of crores of rupees.
The case was heard by Justice Nitin Sambre and Justice Vrushali Joshi. The High Court observed that the petitioners’ demands for forensic auditing and expert assistance in the case had already been fulfilled by the State Government.
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The scam, uncovered in 2014, involved director Prashant Wasankar, his family members, and associates, who are accused of allegedly deceiving investors under the pretence of doubling their money. Sleuths from the Economic Offences Wing (EoW) had apprehended most of the accused for duping thousands of depositors after promising extraordinary returns ranging from 24%-75%. Wasankar remained an undertrial prisoner for years before securing bail.
The fraud trial is currently ongoing in a lower court, where 60 witnesses have already been examined. The High Court asked if a forensic auditor had been appointed to look into the case. The petitioner’s lawyers confirmed that the State Government had already appointed a forensic auditor, and the report was submitted in the MPDA court on March 23, 2023. Based on this, the court decided there was no need for an investigation by the Serious Fraud Investigation Office, and the petition filed by Ashok Lanjewar was dismissed.
In 2017, a group of affected investors, led by petitioner Ashok Lanjewar, approached the High Court, contending that the EOW lacked the expertise to investigate such a large-scale corporate fraud. The petition demanded that the probe be transferred to the Serious Fraud Investigation Office (SFIO), a Central Government agency with proficiency in banking, corporate, forensic accounting, and legal matters. Additionally, the petition sought the appointment of a forensic auditor to scrutinise the financial irregularities.
During Thursday’s hearing, the government informed the court via affidavit that a forensic auditor had already been appointed to assist with the case. The auditor’s report has been submitted to the Maharashtra Protection of Interest of Depositors (MPID) court, where the trial is ongoing. The state also confirmed substantial progress in the case, with 70 witnesses examined thus far.
Acknowledging that the petitioners’ demands had been addressed, the High Court disposed of the petition. “The forensic auditor’s appointment and report satisfy the petitioners’ requests,” the court stated in its order.
At the time of filing the petition, the court had directed the petitioners to deposit 5 lakh as demonstration of their genuine intentions. Following the petition’s dismissal, the court ordered the amount be refunded to the petitioners.
The Wasankar scam surfaced in 2014 when thousands of investors reported losing their life savings to the fraudulent schemes promoted by the family. All accused in the scam, including Wasankar’s wife Bhagyashree, brother Vinay, his wife Mithila, Sarla Wasankar, Kumud Chaudhary and their employees — Chandrakant Rai, Deodutt Kardale, Khapre and others were booked under sections 420, 406, 506, 120 (B) of IPC and section 3 of the MPID Act by the Ambazari Police.
According to media reports, the investigation officer of the Economic Offences Wing (EOW) had stated before the court that the scam is worth Rs 2,000 crore. This makes it among the biggest Ponzi schemes of the country.
The police officer had said over Rs 400 crore were routed through M/s Inter-Connect Stock Exchange (ISE). This was the main broker through which Wasankar dealt in the stock market as a sub-broker. Since stock market investments accounted for 20% of the amount accepted from investors, the total figure can be pegged at Rs 2,000 crore. The remaining 80% amount was collected in cash from investors, the cops said.
