How 2 Indian Restaurants Duped US Investors Of ₹ 3 Crore By Promising 'Secure, Lucrative' Franchisee Dream
how 2 indian restaurants duped us investors of ₹ 3 crore by promising ‘secure, lucrative’ franchisee dream
New Delhi: Two Indian restaurants in the US have been accused of defrauding investors of $380,000 (Rs 3,16,56,926) using deceptive tactics to lure investors as they tried to scale their business in the country.
Bombay Clay Oven and Saucy Bombay, based in the US state of Colorado, were owned by The Bombay Group (TBG), which partnered with a securities broker named Michael Bissonnette.
TBG used the strategy of franchising Saucy Bombay, a newer venture, to capitalise on the burgeoning trend of fast-casual dining.
In the process, the TBG’s owners allegedly misled investors by portraying their investment as a secure and lucrative opportunity. The investors were reportedly guaranteed dividends as high as 2,900 per cent quarterly,
“The investors in this case really believed in The Bombay Group and their restaurant, Saucy Bombay. But as we allege, the investors were not told the truth about the investments and they have not been paid back,” remarked Tung Chan, the state’s securities commissioner, according to NDTV report.
Despite the ‘ambitious plan’, the restaurant chain could not expand and reportedly closed by the end of 2015. Despite the closure, the promoters continued to get fund inflow throughout 2015 and 2016.
The owners Bissonnette and Marshall Miranda refused to speak.