Once hailed as a retail revolutionary, CR Subramaniam the mastermind behind the Subhiksha retail chain now faces 20 years in prison after defrauding hundreds of investors in his ponzi scheme. His dramatic downfall underscores one of India’s biggest business scandals, where a ₹3,500 crore company collapsed into bankruptcy, and its founder landed behind bars.
IIT-IIM Graduate’s Rise in Retail
An alumnus of IIT Madras and IIM, Subramaniam began his entrepreneurial journey in 1991 with Vishwapriya Financial Services, a non-banking financial company (NBFC). Promising high returns through schemes like Prime Invest, Asset-Backed Security Bonds, and Safety Plus, he attracted over ₹137 crore from 587 middle-class and retired investors.
In 1997, he launched Subhiksha, a low-cost retail chain aimed at India’s masses. It quickly expanded to over 1,600 outlets nationwide, selling groceries, medicines, and FMCG products at discounted prices. Major investors like Azim Premji, ICICI Ventures, and Kotak Mahindra Bank backed the retail chain, which peaked at a valuation of ₹3,500 crore.
Behind the Success: A Hidden Ponzi Scheme
Investigators uncovered that Vishwapriya diverted raised funds to finance Subhiksha’s expansion without informing investors, triggering the company’s downfall. Promises of 15-20% returns turned out to be hollow. When returns slowed, Subramaniam used funds from new investors to repay old ones, effectively running a Ponzi scheme.
By 2008, Subhiksha faced severe liquidity issues. Salaries were unpaid, suppliers’ bills mounted, and Provident Fund dues were ignored. In a desperate attempt to cover up the financial mess, Subramaniam created over 80 shell companies to launder money and hide assets, the ponzi scheme was big.
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Legal Reckoning
The Economic Offences Wing (EOW) filed a case against Subramaniam in 2015, followed by an ED arrest in 2018 for money laundering.
In November 2023, a special court in Chennai found him guilty under the Tamil Nadu Protection of Interests of Depositors Act (TNPID). The court sentenced Subramaniam to 20 years in prison and imposed a personal fine of ₹8.92 crore. Additionally, his companies were fined ₹191.98 crore, of which ₹180 crore must be returned to defrauded investors.
About the author – Ayush Chaurasia is a postgraduate student passionate about cybersecurity, threat hunting, and global affairs. He explores the intersection of technology, psychology, national security, and geopolitics through insightful writing.