August 8: Nearly 20 former employees of Hindustan Ciba-Geigy Ltd (HCGL) lost their life savings which they had invested in a company headed by a close associate of their colleague. The employees of HCGL received voluntary retirement benefits after the HCGL management closed its Bhandup factory in December 1992. While they were still not sure what to do with the money, one of their colleague N G Nemlekar suggested that they invest their savings in Consolidated Securities and Consultancy Service Private Ltd, headed by his close friend Vijay Sarashetti. He told them that he himself was a director (finance) in the company.

``Sarashetti, managing director of the company, promised us an interest of 30 per cent per month on our deposits. In the contract, it was agreed that 15 per cent of the interest would be paid by cheque and the balance by cash. The principal amount was also to be returned by advance cheque,'' revealed a depositor.

Investors found the interest rate very attractive. They also trusted Nemlekar as he was a `friend'. ``We decided to invest a major part of our life savings in this company,'' he added. Around 20 of them invested their savings ranging between Rs 1 lakh to Rs 3 lakh. Consolidated Securities collected around Rs 40 lakh.

The investors became suspicious when the advance monthly interest cheques issued by the company started bouncing. When they complained at the company office, they were asked to wait. However, when faced with threats to legal action, Sarashetti told the investors that the interest rate of 30 per cent was too high.

``The company has been giving many reasons for the delay - that its money is blocked in real estate, a huge payment has been made to buy a hotel. But they have not given us evidence of any purchase or investment,'' said another investor who invested Rs 2.5 lakh. On Tuesday, the exasperated investors filed a case of cheating against Consolidated Securities with the Economic Offence Wing (EOW) of Mumbai police, while another case was filed in the Metropolitan Court, Borivli by an investor H S Matkar.

P B Keer, who invested a large sum in the company, is more worried about his friend. ``My friend Shaikh Ismail had deposited Rs 3 lakh in this company. He died in an accident recently. Now his family has no source of income.''

M S Patki an investor said: ``Sarashetti is absconding and Nemlekar says his own money is blocked in the company.'' Nemlekar when contacted by Express Newsline said: ``Before investing their money all the investors had made a detailed study of the company...why are they blaming me now.'' He lamented that he worked for this company but the management did not give him even his salary. ``I have evidence to show that all important decisions were taken by Sarashetti himself keeping me in dark. I have already filed a complaint with the police in May.''

He said, ``I am struggling to get the investors' as well as my money back. But instead of supporting me investors are regularly coming to my house and harassing me.''

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.