Kabir Mulchandani finally arrested! He should pay up for our losses!

MUMBAI: Businessman Kabir Mulchandani who in the late '90s revolutionised consumer electronics marketing
with his innovative ideas has been

India's top 5 accounting scandals Balance sheet reflect co's finances?

arrested in Dubai in connection with a multi-crore real estate fraud.

A senior official who is part of the investigation told TOI over the phone that Mulchandani was in jail. "I am not supposed to reveal the details. I can only confirm that Mulchandani is in jail,'' he said. Kabir's mother was not reachable on her cell phone.

Scores of investors have been allegedly defrauded of over $ 100 million by Mulchandani, chairman of `Dynasty Zarooni'. At least 10 members of an `investment club,' which last year promised huge profits from the company's preferential access to real estate deals, have lodged complaints against Mulchandani, his Emirati business partner, Hilal Al Zarooni, their joint venture `Dynasty Zarooni' and two other employees.

Investors say Mulchandani in March received subscription fees of $ 81,697 (Rs 40 lakh) a month from 12 members. He promised them returns of $ 272,242 (Rs 1.3 crore) a month after six months, or $ 1,633,453 (Rs 8 crore) in September. Zarooni is reported to have denied any participation in, or knowledge of, a fraudulent scheme. "One hundred per cent I deny this, there is nothing illegal whatsoever,'' he said.

A Dubai-based businessman Atul who had invested 3.5 million dirhams (Rs 4.6 crore) for commercial premises in Jume Riah Lake Towers developed by Dynasty Zarooni told TOI from Dubai that he had lodged a complaint after he found that no construction happened eight months after he made the payment. "I made the payment in last April and subsequently we were told by Mulchandani that construction to the sixth level was complete. In December, I visited the site and saw nothing but sand. He has played a fraud on me,'' he said.

In Mumbai, the income tax department is looking out for Mulchandani for the Rs 10 crore that he and his family owes them, Rs 6 crore of which is personally owed by Mulchandani for the assessment year beginning '95-'96. Mulchandani's two companies, Baron International and Baron Electronics, owe the government nearly Rs 60 crore and Rs Rs 37 crore respectively.