The BikeBot Scam

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Apurva Dhamankar

5/6/20232 min read

Had ever the city of Noida wondered that it will be ridden by a scheme worth Rs. 62,100 for a bike and giving a return of Rs. 1.17 lakh p.a.? This is what happened in the “Bike Bot” scam. The Bike bot scam began to probe when CBI began its investigation into the bike taxi business.

History

Sanjay Bhati, an esteemed individual incorporated a real estate company in 2010, and his wife Dipti Bahal became the director of this company. Later in 2017 she resigned from his husband's company and launched a bike taxi business called Bike Bot.

The Business model

Just like any other taxi-providing business service, the bike bot provided bikes that would pick up and drop individuals at their desired location, and the rider(bike owner) would have to pay a commission to the application holder.

The Back-math

The scheme promised large returns to customers on their investment in motorcycles that would be used as two-wheeler taxis. Investment- Rs. 62,100 for a bike. Returns- An EMI of Rs. 5,175 per month along with a fixed rental at Rs. 4,590 per bike per month. It also included a rental income bonus of 5% per bike.

Chronology of the Ponzi Scheme

The scheme was floated in August 2017 and in 2018 end the company floated another scheme for e-bikes with double the investment amount. The process of collecting money from investors and issuing repayments to them went on till early 2019 when a bulk of investors approached the police to complain they had stopped receiving the promised records as per the agreement made erstwhile. This led to the bursting of the Bike bot bubble. The Enforcement Directorate(ED) initiated a money laundering investigation based on various FIRs received. Sanjay Bhati surrendered before a local court while Deepti is on the run.

Highlighting the Quants

1. It is estimated that Rs. 45,000 crore has been defrauded. 2. There are nearly 250 cases registered across the country. 3. The ED has attached movable and immovable assets to the tune of more than Rs 103 crore in the case. These funds will be utilized for repayment to the investors frauded by the Ponzi scheme.

The question arises: instead of so many regulations, so many Ponzi runs in the past India still faces frauds in new faces…are the regulator the black collars deceived in white? Indian regulatory framework. There is still a long way to go!

Thank you.

Regards,

Murtaza Kachwala,

Kautilya, IBS Mumbai.

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