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HYDERABAD: The Economic Offences Wing of the Cyberabad Police has launched a comprehensive investigation into an alleged investment fraud of nearly Rs 670 crore involving approximately 7,400 investors across Telangana. The mastermind behind the massive operation has been identified as Nanavath Bhupal Naik, a native of Vikarabad district and a former mason and petrol pump attendant. Naik allegedly solicited large deposits through two corporate entities by promising monthly returns of around four percent under the pretext of stock market trading and organic farming ventures.
The fraudulent scheme came to light after the investigative wing registered three separate cases following over 500 individual complaints filed by duped depositors. Despite the scale of collections running into hundreds of crores, initial inquiries have revealed an alarming deficit in available assets. Investigators scrutinizing nearly 70 bank accounts linked to Naik, his companies, and their directors have managed to trace a mere Rs 35 lakh so far, raising serious concerns regarding the diversion of public funds.
Attractive Returns Offered Without Regulatory Clearances
According to investigators, Naik incorporated Shares Bazaar Private Limited in 2020 with the stated objective of carrying out stock trading activities. Investment collection drives gained significant traction between 2022 and 2023, during which prospective clients were assured regular monthly profits of four percent on their capital. To broaden the investor base, Naik leveraged his preexisting customer network from his earlier career in stock brokerage, supplemented by aggressive online promotional campaigns.
The promise of steady and lucrative earnings drew thousands of contributors into the fold. However, police findings indicate that Shares Bazaar Private Limited never possessed the requisite regulatory approvals from competent authorities to accept deposits from the general public. Despite the absence of legal authorization, the company continued to mobilize substantial sums from individuals seeking dependable secondary income through financial markets.
Classical Ponzi Mechanism Led to Eventual Default
The ongoing investigation by the Economic Offences Wing indicates that the enterprise was operated on the classic lines of a Ponzi scheme. Officials noted that the payouts disbursed to existing participants did not originate from legitimate market gains or productive business activities. Instead, funds collected from newly recruited depositors were systematically circulated to service the promised monthly returns of earlier investors.
Such structures remain functional only as long as fresh inflows outpace withdrawal demands. The arrangement operated smoothly until 2025, when mounting payment obligations outstripped fresh deposits. As cash flows dried up and default pressures intensified, the mechanism collapsed entirely, prompting disgruntled depositors to approach law enforcement authorities with formal grievances.
From Manual Labour to Large Corporate Setup
Inquiries into Naik’s background reveal a rapid transition from modest employment to managing multi-crore investment networks. After struggling to clear his intermediate examinations following secondary school, Naik reportedly completed his studies through open schooling and distance education courses. He worked as a mason and later at a fuel station before entering financial services around 2013, when he took up an agency role with a brokerage firm.
By 2016, Naik established a franchise of the same brokerage in Kukatpally, establishing a wide client base that paved the way for his independent ventures. Around the same time, he registered Kisan Parivar Limited, a firm supposedly designed to pool marginal farmland for commercial organic cultivation. Although the agricultural entity remained largely inactive for several years, investigators suspect it served as an additional vehicle for collecting capital. The police have commissioned a comprehensive forensic audit of both firms, scheduled for completion this month, to track fund trails, identify concealed properties, and evaluate recovery prospects for affected depositors.
