The Uttarakhand High Court has linked a massive chit-fund fraud involving Loni Urban Multi State Credit & Thrift Cooperative Society Ltd to an existing PIL seeking a Central Bureau of Investigation probe. The operations of the society in Uttarakhand allegedly defrauded investors of more than ₹800 crore before shutting down in 2023-24, prompting legal, social, and regulatory scrutiny.
How the Fraud Unfolded
The chit-fund society, based in Ghaziabad, set up offices in Dehradun, Rishikesh, and Pauri in 2021, promising high returns through local agents. It operated without proper registration under the Societies Registration Act. Investors from multiple districts were lured in, but by 2023-24, the society shut down and absconded, leaving many with heavy unpaid dues.
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FIRs and Investigations So Far
Uttarakhand recorded 14 FIRs against the society, and 56 more were filed in other states. Investigators say the main accused fled to Dubai. Local agents are now facing pressure from investors, and police have complained of challenges in tracing the funds and accused.
Court’s Response and PIL Integration
The High Court, while hearing a PIL demanding a CBI probe, directed the case to be merged with that PIL for a joint hearing. It also asked CBI counsel to clarify whether the federal agency has legal and operational capacity to investigate. The PIL questions whether the state government and the Registrar of Societies were negligent in allowing an unregistered external entity to run the scheme.
Regulatory Lapses Exposed
A 2023 show-cause notice by the Registrar of Central Cooperative Societies flagged unauthorized operations and complaints from the RBI regarding unpaid deposits. The society’s response denied the allegations but was found contradictory. Ultimately, the society was ordered shut in March 2024.