The investigation into Adityaraj Capital Private Limited has revealed what authorities describe as a classic pyramid or Ponzi-style investment scheme that allegedly attracted between 6,500 and 7,000 investors across multiple states by promising assured monthly returns of 5 per cent.
Addressing a joint press conference, the Commissioner of Police and the Deputy Commissioner of Belagavi outlined the preliminary findings of the inquiry. Officials said the company had actively encouraged members of the public to invest through meetings and promotional programmes, offering guaranteed returns of 5 per cent per month through written agreements and investment documents.
Authorities said the firm’s business model appeared to operate on two fronts — raising funds from the public and offering investment opportunities. However, investigators found that investors were not adequately informed about the risks involved. Instead, they were promised unusually high assured returns, a practice that raised immediate regulatory concerns.
Officials stated that investors were made to sign leverage funding agreements that included lock-in periods but lacked proper risk disclosures. The administration believes these arrangements fall within the ambit of the Karnataka Protection of Interest of Depositors (KPID) Act.
According to investigators, the company claimed that funds would be invested in futures and options trading. However, officials pointed out that no individual or entity can legally guarantee fixed returns from such market-linked investments. Authorities further noted that the company was not registered as a Portfolio Manager with the Securities and Exchange Board of India (SEBI) and therefore could not legally manage public investment portfolios or assure returns.
“Prima facie, the operation resembles a pyramid scheme where money collected from new investors is used to pay returns to earlier investors,” officials said during the briefing, adding that such schemes typically benefit early entrants while exposing later investors to significant losses.
The probe has revealed that Adityaraj Capital Private Limited allegedly mobilised funds from more than 6,500 investors. Preliminary findings indicate that approximately ₹211 crore passed through four bank accounts before being transferred to accounts linked to the company’s entities.
Investigators have also found that investors were issued promissory notes and post-dated cheques, which are now being treated as documentary evidence of investments made under the scheme.
Authorities alleged that the company misrepresented its financial viability and failed to disclose critical information regarding the deployment of investor funds. Officials said that lack of transparency and non-disclosure of material facts are key elements being examined under provisions of the KPID Act.
The investigation has further revealed that the company was neither registered with the Reserve Bank of India (RBI) as a Non-Banking Financial Company (NBFC) nor registered with SEBI. Officials said no approvals were found permitting the company to collect public deposits or offer investment products of the nature being marketed.
Investigators also suspect that digital records were deliberately destroyed. Cyber police have now joined the probe and are working to recover electronic data and transaction records.
The office of Adityaraj Capital Private Limited in Bhagyanagar has been sealed, and a case has been registered at Tilakwadi Police Station under the provisions of the Banning of Unregulated Deposit Schemes (BUDS) Act and the Karnataka Protection of Interest of Depositors (KPID) Act.
The FIR names Adityaraj Capital Private Limited, Adityaraj Commodities Private Limited, Adityaraj Securities Private Limited, company founder and CEO Balraj Mane, and several others.
Officials said that since the alleged fraud exceeds ₹50 crore, the case is expected to be transferred to the Criminal Investigation Department (CID) in accordance with legal provisions. The investigation is ongoing, and authorities believe further disclosures may emerge as financial records, digital evidence and investor documentation are analysed.
Adityaraj Capital Case: Key Findings So Far
- Office of Adityaraj Capital Pvt. Ltd. in Bhagyanagar, Belagavi, has been sealed.
- Case registered at Tilakwadi Police Station under the BUDS Act and KPID Act.
- FIR names Adityaraj Capital Pvt. Ltd., Adityaraj Commodities Pvt. Ltd., Adityaraj Securities Pvt. Ltd., founder and CEO Balraj Mane, and others.
- Authorities estimate 6,500–7,000 investors may have invested through the scheme.
- Investors were allegedly promised assured returns of 5% per month.
- Public meetings and promotional programmes were reportedly used to attract investors.
- Officials say investors were issued promissory notes and post-dated cheques as proof of investment.
- The business reportedly operated on two fronts:
- Raising funds from the public.
- Offering investment opportunities linked to market trading.
- Funds were allegedly claimed to be invested in Futures & Options (F&O) trading.
- Investigators say guaranteed returns cannot legally be assured in market-linked investments.
- Authorities allege there were no adequate risk disclosures to investors.
- Investment agreements reportedly contained lock-in periods but lacked transparency regarding risks.
- Preliminary inquiry found the company was not registered with RBI as an NBFC.
- The company was also not registered with SEBI.
- Officials say the firm was not authorised as a Portfolio Manager and therefore could not legally manage public investment portfolios.
- Police and district authorities describe the operation as a suspected Ponzi/Pyramid scheme.
- Investigators believe returns paid to earlier investors may have come from money collected from new investors.
- Authorities allege there was misrepresentation of financial viability and investment risks.
- Lack of transparency and non-disclosure of material information are key aspects under investigation.
- Cyber police have joined the probe after allegations that digital records were destroyed.
- Efforts are underway to recover electronic data and transaction records.
- Since the alleged fraud exceeds ₹50 crore, the case is expected to be transferred to CID as per legal provisions.
- Further disclosures are expected after examination of financial records, digital evidence, and investor documentation.