Eighteen months after the Kerala police launched an investigation into the alleged ₹3,141-crore money chain scam run by Highrich Online Shoppe Pvt Ltd, the state government is still unable to sell the company’s attached assets and compensate the depositors. While part of the delay stems from a procedural lapse by the government-appointed Competent Authority, much of it, however, stems from the company's legal manoeuvring.

Highrich promoters Kollat Dasan Prathapan (43), a repeat offender, and his wife Sreena Prathapan (35), alias Sreena Sreedharan, have been filing petitions — challenging the attachment of their properties and the freeze on their bank accounts — up to the Supreme Court. In the pleas, they liken Highrich to online marketplaces such as Amazon and Flipkart, and at times they equate it with multi-level marketing firms such as Amway and Oriflame. In one petition, they argue that the Competent Authority under the Banning of Unregulated Deposit Schemes (BUDS) Act cannot take up the case because the first complaint was filed by a non-depositor.

In their latest petition, they contradict their earlier stand and urge the Kerala High Court to direct the Authority to appoint an independent valuer to assess the assets and its dues to depositors.

The defence also sought an exemption from legal repercussions for Sreena, claiming that although she was a director, she was not involved in the company’s day-to-day affairs.

Justice C S Sudha of the HC on April 3 extended the interim stay on the assets sale and scheduled the next hearing for June 2.

Challenges and counterpoints
Advocate Rajesh Kumar T K representing Highrich, cited 42 grounds seeking to quash the attachment order confirmed by the Thrissur Additional Sessions Court-III on January 28, 2025.

The first ground was that the initial complainant, retired SP Valsan P A, is not a depositor and therefore the police could not have invoked the BUDS Act. The Sessions Court rejected this, quoting rules that "the complainant need not be a depositor in the company to set the law in motion". Sixty-seven FIRs have been registered against Highrich across Kerala. Except for one, all the complainants are depositors.

Competent Authority or Collector?
In June 2024, the HC set aside the first provisional attachment order because it was not confirmed within the mandatory 60-day period. The Authority circumvented the procedural lapse by reissuing the provisional attachment order at 10.47 pm, the same day "to safeguard the interest of the innocent depositors", denying Highrich the opportunity to move the court to lift the attachment order.

But in their petition in the HC, the promoters claimed that the late night provisional attachment order was issued by the Thrissur Collector and not the Authority. The order, reviewed by Onmanorama, bears the name of Sanjay M Kaul, a secretary-level officer of the state government, designated as the Competent Authority.

Highrich has also challenged in HC the reissuance of the provisional attachment order, arguing that it was done without due process. The Sessions Court had noted that although the BUDS Act does not explicitly permit reissuing a provisional attachment order once it lapses, it also does not prohibit it.

₹3,141-cr grocery seller?
In its appeal, the promoters say that Highrich was merely selling grocery and personal care products through its online platform and had the right to accept advance payments. However, the Sessions Court held that Highrich had raised public funds through various schemes. A 'Mortgage Capital Bond Agreement' showed that the company received ₹5 lakh from a depositor. Circulars on its website promoted offers, including ₹5 lakh shares for an OTT platform, ₹3 lakh subscriptions for HR crypto coins, and a 5,000-acre Green Agro High Tech Farm project. Software expert Kamash Gipra, who developed Highrich’s website, demonstrated in court that 17,21,467 subscription units were sold at ₹10,000 each — amounting to ₹1,721.47 crore. (This figure was relied upon by the Enforcement Directorate in its money laundering probe.) As per the investigating officer’s report on November 16, 2024, the company had collected over ₹3,141 crore.

Another challenge was that the attachment petition referred to Prathapan and Sreena as proprietors instead of directors, and failed to mention the Corporate Identification Number (CIN) of Highrich. The court dismissed this as a clerical oversight.

The defence claimed that the Authority had wrongly invoked both Sections 3 and 5 (related to unregulated deposit schemes) and Section 4 (related to regulated schemes) of the BUDS Act together. The Sessions Court, however, focused only on Sections 3 and 5 and made no observation on Section 4.

In yet another petition, the company requested that the Authority be restrained from attaching personal properties of the directors and the company until a proper assessment of dues was made. But Dr Riju Aikkal, an activist coordinating the victims' efforts, pointed out that no provision under the BUDS Act requires the Authority to determine dues before making provisional attachments.