The National Company Law Tribunal (NCLT), Bengaluru, has ordered the winding up of Super Royal Holidays India Pvt. Ltd., Bengaluru, by declaring that the incorporation and conduct of business of the company was for “fraudulent objects” of ponzi scheme in the guise of offering holiday tour packages by collecting membership fees.
The Ministry of Corporate Affairs (MCA) sought the winding up of the company following the outcome of an investigation carried out after noticing that the company had deposited and withdrawn around ₹10 crore during the period of demonetisation in 2016.
“On perusing the financial statements of the company, it is clear that the money they collected by way of membership fees etc. was largely being pocketed by agents and director-cum-shareholders by way of commission, awards, dividends for directors, etc., leaving paltry remains for the so-called service [tour packages] for their members. Therefore, it is established that the company is running a ponzi scheme, as rightly contended by the MCA,” the tribunal held.
The tribunal also said that the company was “established exclusively for the benefit of the three promoters-cum-directors-cum-shareholders and their agents” and hardly any service was provided to most its customers.
The company enrolled members by collecting ₹11,000 for single membership, ₹22,000 for triple membership, and ₹33,000 for family membership. This life membership fee carried an offer of free tour packages for two nights/three days, to be availed within the next three years by paying a package cost ranging ₹375 to ₹4,800, depending upon location. The company claimed that it had around two lakh members, but could not produce the complete membership details before the authorities.
On examination of the company’s business model, the MCA found that the company was running “nothing but a ponzi scheme by collecting deposits under the guise of membership fee/enrolment fee from the general public”.
One of the directors, who was caught by the immigrations authority at Kempegowda International Airport while trying to board a flight to Thailand in September 2019, had disclosed to the authorities that the company had collected over ₹250 crore through the so-called membership fees.
