Highrich scam: Kasaragod victims chase justice for 6 months as govt stonewalls probe

Kasaragod: Prajith V V (30), Manoj Kumar U (54), and Surendran K (57), along with their families from Kasaragod's Madikai grama panchayat, lost around Rs 25 lakh to the Ponzi schemes run by Thrissur-based Highrich Online Shoppe Private Limited.

Today, however, they feel a small sense of relief as their relentless efforts forced the Kasaragod police to register three FIRs against the company, its habitual swindler promoter Kollat Dasan Prathapan (43), his wife Sreena Prathapan (35), and their agents Vijitha Sunil and her husband C Sunil Kumar. "For over six months, we have been fighting to get our complaints investigated and recover our money. The District Collector misled us and sent us to Thrissur Collector, who sent us back. Kasaragod police blocked us by neither acting on our complaints nor registering an FIR," said Manoj Kumar. The Hosdurg police finally registered FIRs on December 16 based on complaints filed by Prajith, Manoj Kumar, and Surendran, but only after being directed to do so by the Hosdurg subordinate court.

The FIRs were registered under the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019, which empowers the government-appointed 'Competent Authority', a secretary-level officer, to attach the assets of the illegal deposit takers, auction them and distribute the money to the deposit givers on a priority.

"Three siblings from Cheruvathur, who struggled alongside us, also lost around Rs 25 lakh, but their FIRs remain unregistered because they couldn’t afford to hire lawyers,” said Manoj Kumar.

In a submission to the Assembly in January 2024, Kerala Chief Minister Pinarayi Vijayan said the promoters of the company are being investigated after they illegally collected Rs 3,141.34 crore from the public by promising exorbitant returns. However, several complainants told Onmanorama that station house officers were unofficially instructed by IPS officers at the police headquarters not to register cases against Highrich and its promoters. "That's what the Hosdurg police told us when we first approached them to register our complaints in April," Manoj said.

The government's resistance to address Highrich victims has resulted in the registration of only 54 FIRs with a total claim of around Rs 5.5 crore, said Dr Riju Aikkal, an activist coordinating the victims' efforts for justice. "Almost all the cases were registered only after court orders," he said.

On June 19, 2024, the Kerala High Court directed the police to register crimes and commence investigations unless and until the CBI assumes responsibility for the case (The CBI has not yet taken up the Highrich case.). Despite this directive, several victims continue to wait outside police stations such as Thrissur Town, Chakkarakkal, and Cherpu, seeking justice, said Dr Aikkal. "The police often refuse to register cases and advise victims to move courts. But to go to court, victims are forced to spend money they cannot afford," he said.

The low number of FIRs, coupled with a negligible 0.2% claim, highlights the stark disconnect between the scale of the scam — estimated by the CM at Rs 3,141 crore — and the government's failure to act on victims' complaints.

In contrast, the same LDF government registered 168 cases of cheating in the Fashion Gold deposit scam without court intervention, and their total claim was estimated at Rs 26.15 crore. The state police also arrested Fashion Gold promoter and Muslim League's former MLA M C Kamaruddin, who remained in prison for 96 days.

Also, the Directorate of Enforcement (ED), which came in late in the Highrich case, submitted its first chargesheet in August 2024, naming 34 persons, including Prathapan and Sreena as accused. The central agency has pegged the scam at Rs 1,652 crore and attached assets worth Rs 277 crore, claiming them to be proceeds of crime.

Retired Superintendent of Police Valsan P A (67), an economic offences specialist and the first complainant in the Highrich scam, said he encountered the same hurdles as the victims are still facing.

The Kozhikode resident, who retired in 2017 after 36 years in police service,  said he first came to know of the Highrich fraud in July 2023 when he visited a friend in Thrissur. "The family was talking of Highrich as some economic wonder giving impossible weekly returns on their deposits. I immediately knew it was a fraud," he told Onmanorama.

He returned home, did meticulous research on Highrich, and filed his complaint with Thrissur's Cherpu Police Station, located just 1.5km from Highrich's main office at Neruvassery in Arattupuzha. "The SHO who I mentored was impressed by the complaint and said an FIR should be immediately registered. In the evening, when I was in Thiruvananthapuram, the SHO called me to say that the Thrissur Rural SP asked him not to register the FIR," the retired officer said.

Valsan did not give up. He went to the Crime Branch in the police headquarters. "The DySP acknowledged the complaint was solid but said he will need one week to conduct an inquiry," he said. After two weeks, when Valsan checked with him, the officer told him that he could add the "new information" to a 2021 case registered under the BUDS Act in Thrissur. "I found out that the investigation into the 2021 case was complete and the chargesheet was already submitted in court. They were stonewalling me," he said.

Valsan then approached the special court for BUDS Act cases in Thrissur and secured an order directing Cherpu police to register an FIR against Highrich and its promoters.

The FIR was registered on September 18, 2023. Two months later on November 21, 2023, based on Valsan's FIR, the BUDS Act Competent Authority Sanjay M Kaul -- the officer implementing the Act in Kerala -- ordered the Thrissur Collector V R Krishna Teja to attach the properties and assets of Highrich and its promoters. (Teja, however, blundered by proceeding with the temporary attachment but failing to inform the court within the mandated 60 days, which led the High Court to overturn the order in June 2024. The Collector, correcting his mistake, reinitiated the attachment process on the same day the court issued its adverse ruling.)

The BUDS Act is a powerful law to protect victims' interests but they are made to run around by the same people who are supposed to implement the law, said Manoj Kumar. "The government first failed us by not shutting down Highrich when it was duping people for more than five years with the promise of exorbitant returns, and then failed us again when we approached the Collector and the district police chief to help them get justice," he said.

Retired Superintendent of Police Sadanandan P P, an ace investigator and published author in financial fraud, said Highrich was accused of violating the BUDS Act, and it "definitely" came under the purview of the police investigation. Section 29 of the BUDS Act mandated Station House Officers "to record information about the commission of an offence under this Act and inform the same to the Competent Authority".

Govt's failure
In 2019, neighbours Vijitha Sunil and her husband, Sunil Kumar, approached Manoj, urging deposits in Highrich. They promised Rs 30,000 in three years for every Rs10,000 invested, with repayments made through weekly instalments. The promise translated to 44% compound interest, which itself is exorbitant. However, since the money is returned weekly, the effective weekly return is 1.81%, translating to a staggering annual return of 153.52%. "We found the returns unbelievable and dismissed it as a fraudulent company. But the couple kept sending WhatsApp messages about Highrich," said Manoj Kumar.

In 2022, the couple approached them again, saying Highrich was thriving and the government would have shut it down if it were a fraudulent company. They fell for it. Manoj pawned his family jewellery and deposited Rs 1.5 lakh in October 2022, and his wife Seena deposited Rs 5 lakh in March 2023, as a 'mortgage capital bond' in Highrich's streaming business HR OTT.

Prajith V V, a dairy and vegetable farmer in Madikai panchayat, also pledged gold and invested Rs 5 lakh in September 2023.

Surendran K, a bus driver, took a loan from a cooperative bank and invested Rs 9.9 lakh in Highrich in September 2023. His sister Leela invested Rs 4 lakh in November 2023.

When Highrich went bust, Surendran fell into depression. His wife rescued him by selling off her inherited land and repaying the bank loan. "They, like hundreds of late depositors, would not have lost their hard-earned money if the government had acted on my complaint in July 2023," said Valsan, who retired as the commandant of the Malabar Special Police, a crack force of Kerala Police.

But the government need not have waited for a complaint from anybody. According to the 2016 'Master Direction' from the Reserve Bank of India, non-banking financial companies (NBFCs) are prohibited from promising returns above 12.5% per annum. Highrich is neither an NBFC nor registered under the Kerala Money Lenders Act to take deposits by promising assured exorbitant returns. "The government could have acted suo motu and shut it down," said a lawyer.

Kasaragod complainants said when they approached Kasaragod Collector Inbasekar K, who is the Assistant Competent Authority under the BUDS Act, he directed them to the Thrissur Collector. In his reply on October 5, Inbasekar said their complaints were "investigated in detail by the district police chief. For redressal of your complaint, you may contact the Thrissur District Collector. The investigation officer has informed you of the same."

The complainants received no information from the district police chief. After the Thrissur Collector sent them back, Manoj Kumar went to the collectorate and gave another complaint to Inbasekar, personally. "I have not heard from him on that complaint." There is no reply from the district police chief also on the complaint sent in July 2024. Then they met Kanhangad MLA E Chandrasekharan who took up the matter with Hosdurg SHO. "The SHO advised us to get a court directive," Manoj Kumar said.

Dr Aikkal said most of the promoters have abandoned the company. "Now, lower-level leaders are actively discouraging victims from registering cases, warning them that doing so would bring trouble upon themselves," he said.