"so clients were eager to sign up."
Popular financial influencer couple Ashesh and Shivangi Mehta allegedly ran a drug empire worth Rs. 300 Crore (£29 million).
They are also accused of running an illegal money management business.
Lookout notices have been issued against the couple after they reportedly transferred Rs. 174 Crore (£17 million) into various accounts and fled their home in Goregaon, Mumbai.
They ran a business called Bliss Consultants, where Ashesh was named founder and principal trading partner, and Shivangi was named director of operations.
When clients sign with Bliss Consultants, the agreement states that it is a sole proprietorship and that it is not a Securities and Exchange Board of India (SEBI)-registered portfolio management service (PMS) or alternative investment fund (AIF) company.
According to Kruti Gogri, founder of Kruti Gogri & Co, any SEBI-regulated fund management entity has to declare its registration status prominently along with details such as its registration number.
She said: “If they are an alternative investment fund, they also have to say if they are category I, II or III… though with AIFs the investors are considered more financially sophisticated and, therefore, the disclosures may not be as prominently done.”
According to sources, the business was largely advertised through word of mouth.
One person said: “98 to 99% of his clients have not spoken to him (Ashesh Mehta).”
Therefore, clients had no way of checking if the firm was licensed to manage third-party funds.
Despite not knowing who was in charge of their money, investors seemed eager to sign up with the business because it was giving 2.5 – 3% returns each month.
A source said: “These kinds of returns were given consistently for years.
“There was not a single month in which he posted a loss, so clients were eager to sign up.”
There is no indication that the influencer couple made any effort to promote the film directly.
Clients said they could either sign up or not, depending on the reference they had heard.
But Ashesh frequently advertised his trading prowess by posting profits made on Twitter.
It is reported that there are at least 200 people who had signed up with Bliss Consultants.
Signing up begins with a know-your-customer (KYC) link sent to the client. Once details have been provided, the client is asked to transfer funds to an account registered under Bliss Consultants.
Onboard clients can now track the ‘portfolio’ and withdraw funds using an app called DIFM.
The app appeared legitimate, with clients investing between Rs. 5 Lakh (£4,800) and Rs. 20 Crore (£1.9 million).
According to the agreement, the profit and loss-sharing arrangement has a 70-30 split, where 70% of the profit or loss would be the clients’ and 30% of the profit or loss would be Bliss Consultants.
The company’s website has a seven-step signup procedure.
It does not mention the bank account. Instead, it does a sleight-of-hand by saying that the client has to transfer funds to an account managed by a SEBI-registered share broker.
It is believed this was done to give the impression to a future client that there is some regulatory oversight over Bliss’ products.
In reality, clients can only send funds to a bank account attached to a trading account. In this case, the funds go to the bank account registered in the firm’s name.
Following the drug empire allegations, the KYC link now opens to a blank page that reads “coming soon”.
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