COIMBATORE: A major scam came to light in the textile city on Saturday with the arrest of a couple, who allegedly swindled Rs 9.20 crore raised by issuing initial public offering (IPO) at the Coimbatore Stock Exchange. Police said, after raising the huge sum by distributing shares to over 1,000 investors in 1994 to promote a spinning and export company, the couple managed to escape law enforcement agencies for nearly 17 years.“The promoters of Bafna Spinning Mill and Export limited had not taken any initiative to build a factory or any facility. They had neither paid any returns nor sent their balance sheets to investors. They have not filed the balance sheets with us too. The IPO is nothing but a well-planned attempt to swindle investors’ money,” said M Manuneethi Cholan, Registrar of Companies, Coimbatore.In fact, the Bafna Spinning Mill and Export limited had been notified as a vanishing company by the Union Ministry of Corporate Affairs for some period, he said.The promoters of the company - R Chitraj Bafna (54) and his wife Uma Jain Bafna (54), - were arrested by the police at their residence in RS Puram on Saturday, after a court issued a non-bailable arrest warrant against them.After repeated complaints from investors, the Registrar of Companies had filed a case in the court against the promoters of the company about three years ago, under the Companies Act.“However, despite repeated summons, Chitraj Bafna and Uma did not bother to appear in the court. The court issued a non-bailable warrant on Thursday and they were arrested on Saturday,” said Manuneethi Cholan. Police sources said that the couple had diverted the capital raised through the IPO to buy real estate properties in various parts of the country. They were remanded in judicial custody at the Central prison. “We will continue our crackdown on such unscrupulous promoters. However, investors should be careful while making investments. They should check the credentials of the promoters before investing in a company,” he said.
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