Tamil Nadu Police's Economic Offences Wing (EOW) on Saturday arrested Subhiksha retail outlet chain founder R. Subramanian for alleged cheating of depositors of group company Viswapriya Financial Service to the tune of Rs.250 crore, police said.
An alumni of IIT and IIM, Subramanian floated Viswapriya Financial in 1991 and later ventured into retail under the brand Subhiksha.
A pioneer in India‚Äôs organized retailing industry, Subhiksha once had around 2,000 stores across the country, but by 2009, the chain collapsed. After an aggressive expansion, the retail business collapsed and since then, Subramanian has been facing several cases.
Viswapriya Financial had been banned by Sebi twice in the past for irregularities.
"We arrested him this (Saturday) morning in Chennai," a police officer in the EOW said.
He said the charge against Subramanian was that the company had accepted deposits from 4,000-5,000 people and did not repay the amount when the deposits matured.
According to the official, a case was registered against Subramanian in 2013 but it got prolonged as he resorted to a lengthy legal battle.
On Friday, the Madras High Court rejected the anticipatory bail application of Subramanian.
Justice V Ramasubramanian, who refused the bail, in his order said "the police and the depositors association are of the strong view that unless Subramanian was taken in police custody, a clear picture would not emerge. So, anticipatory bail could not be granted."
Subramanian was arrested under the Tamil Nadu Protection of Interests of Depositors (In Financial Establishments) (TNPID) Act. The police official said the next job was to identify the movable and immovable properties and try to encash them to pay off the depositors.