UAE | Crime

Fate of Sunfeast investors sealed

Fears are growing that thousands of investors in Dubai will never get back money sunk in dubious firm’s Ponzi scheme

  • By Mazhar Farooqui, Deputy Editor
  • Published: 23:19 May 29, 2013

  • Image Credit: XPRESS Archives
  • Sunfeast Infotech’s Oud Metha office which was sealed by authorities on April 29

DUBAI: Thousands of Sunfeast Infotech scam victims in Dubai may never get back the millions they sank into an elaborate Ponzi scheme. The reason: There is no money left and no one to turn to.

The dubious firm’s two Indian owners Raja and Veer Kumar have been behind bars since April 29 and the investors’ sole point of contact, marketing manager, Radhai Gopalakrishna, has suddenly gone incommunicado.

For days now, the investors had banked on Radhai, who had repeatedly assured them that they would be paid back in full.

But her unexplained silence has left investors in a quandary.

Left with no choice, hundreds of victims thronged Al Rifa’a police station on Tuesday and Wednesday in the fervent hope of recovering their money. But it seems they have missed the bus.

Last week scores of complainants were refunded their principal amount, but those who turned up at the police station this time got nothing.

Until last Wednesday, a dedicated Sunfeast staff was assigned to the police station to hand over cash to the complainants against invoices and passbooks.

That’s not the case anymore.

Understandably, many victims are blaming Radhai and the founder of an investor’s Google group forum, Babar Yaqub, for dissuading them from approaching the police.

“We were misled into believing that we will get our principal plus profit if we wait. It was a foolish move as we lost everything. I wish I had lodged a report earlier,” said Filipino Joe, who had put in Dh100,000 borrowed from a loan shark.

An Indian woman who lost Dh55,000 blamed Babar and Radhai for giving them false hopes.

“They are directly responsible for my hopeless situation,” she said, holding back tears.

But Babar said it’s unfair to target him. “Sunfeast had been supporting investors for one year so I stood by them. I tried to help them tide over the crisis so that they could pay us back, but now we have no choice but to execute our Plan B, We will proceed legally,” he told XPRESS.

Evidently, the back up plan has come a wee bit late in the day. “What’s the point of lodging a report now when whatever money they had, has been disbursed? Plan B should have been Plan A,” said an angry Nigerian man, one of hundreds of members on the Google group forum.

Many disgruntled victims expressed similar views.

Calls made to Radhai by XPRESS went unanswered. However, she sent an SMS saying investors cannot be paid back unless one of the company owners is released. “Any cash flow is possible only with their signatures and presence,” she said.

A lawyer familiar with such cases said he doubts there is any cash left for late-comers. “Sunfeast had no business model. They were just rotating cash by taking money from new investors to pay old ones. There’s no way they can refund everyone.”

The Sunfeast scam, arguably the biggest in the country, has left behind a trail of 6,000 devastated families. Many used their life’s savings and borrowed heavily from banks and loan sharks to buy pointless “outsourced home-based typing jobs” peddled by the company before it was shut down by Dubai Economic Department (DED) last month.

Comments (8)

  1. Added 11:09 May 30, 2013

    Authorities need to take serious action against the Sunfeast owners. I'm one of the investor since October 2012, Customers started investing huge money only in the month of Feb, Mar and Apr 2013.I'm very much sure the money is there with someone. Till Dec 2012 there were only 15 counts of big investors and rest were all small investors this information was given by Veera Kumar himself as he was pulling me in to make big investment in November 2012... Most of the investors have taken loan, Now how will they pay back the banks? Now the banks will be affected due to this Ponzi scheme. Help needed for poor investors to repay the banks....

    Raghu, Dubai, United Arab Emirates

  2. Added 08:41 May 30, 2013

    First of all there is no shortcut in life, money has to earn thru hard work, Almighty test people by giving; not giving individually, Greed is worst part of it, it's a risk to invest in something which has no concrete basis. The company was like walking in dark alley with huge holes in its way and one was sure to fall some or the other time. Hard earned money lost is very painful as it bring lots of unwanted problems. Those who have taken loan are nothing but fools.

    Ebrahim Al Mulla, Abu Dhabi, United Arab Emirates

  3. Added 08:21 May 30, 2013

    Sorry to say but as long as there is greed and the desire to 'Make a Quick buck, without Working' such Ponzi schemes will keep coming up all the time! I hope the details of this Ponzi scheme are widely published so that people stay aware of such happenings and do not fall prey again.

    Jenny Michaels, SHJ, United Arab Emirates

  4. Added 08:01 May 30, 2013

    ponzi schemes are like australian cows, u get the profit early stage, and then nothing ...

    Fouad, Al Ain, United Arab Emirates

  5. Added 06:11 May 30, 2013

    Its a never-ending vicious cycle in the land of dreams. Having spent nearly 14 years in Dubai, and returning to India a few months back, I have witnessed a unique phenomenon wherein unsuspecting individuals fall prey to 'get-rich-quick', ponzi, money multiplier schemes. The carrot-dangling strategy of the schemes are indeed manicured and pedicured with a makeover feeling that even senior executives working in reputed firms are lured into the trap in an instant. My experience in all these years of living n Dubai made me wiser and come to the obvious conclusion that there is no substitute to hard work and honesty. Though the Sunfeast scam has wiped away the smile and dreams from 6000 families in Dubai, does it mean there will not be others who are victims, but ashamed to admit so for fear of social stigma. The vicious cycle of loan sharks, bank defaults, unanswered calls, going underground etc. is much more harrowing than life imprisonment. Its said that desperate times call for desperate measures, however, with most of the victims of Sunfeast scam having given up their lifetime savings or borrowing loans for quick returns from the scheme, its a bottomless pit which keeps surfacing ever so often. Let better sense prevail.

    ALEX, KOCHI, India

  6. Added 05:14 May 30, 2013

    Another nail in the coffin of fraudsters and the people who think that there are shortcuts to make money

    Hari, Dubai, United Arab Emirates

  7. Added 02:15 May 30, 2013

    The creator of the google group misled the people deliberately,for his own selfish reasons making them believe that everything will work out....The people on the forum were only found fighting with each other instead of trying to find a solution....From Plan A to plan Z.? Well the Pied Piper of Hamelin is now under scutiny...

    A, AUH, United Arab Emirates

  8. Added 00:55 May 30, 2013

    The Investors are partially to blame as their greed has made them belive the bogus promises made by M/S Sunfeast. It is very true that any time you hear of a high returns without seeing a valid reason the chanses are almost 100% you loose your money. I don't know why people do not learn from the past and keep on falling to the new scams

    MAHESH, SHARJAH, United Arab Emirates