NOIDA (India CSR): A shocking case of corporate social responsibility (CSR) fraud has come to light in Noida, where fraudsters deceived a spiritual trust by promising a Rs 5.5 crore CSR fund and swindling Rs 1.10 crore in the process. The Noida Police have registered a case at Sector-113 Police Station and launched an investigation into the scam.
The incident highlights the growing risks of CSR fund misappropriation, raising concerns about fraudulent activities targeting NGOs, foundations, and charitable trusts seeking financial support for social welfare projects.
How the CSR Fraud Unfolded
According to a complaint filed by chartered accountant Kamalakar Mishra, the scam originated in 2019, when he was associated with Rudra Kripa Foundation Trust. The main trustee, Madhav Kant Mishra, assigned him the task of securing CSR funds from corporate donors.
To facilitate the process, the trust also involved businessman Sanjay Arya, who reached out to multiple corporate contacts. In September 2019, the trust officials came in contact with Radhey Shyam Singhal, his wife Saroj Singhal, and Amit Agarwal, who claimed to represent Rajesh Exports, a well-known business entity.
The accused offered to arrange a CSR donation of Rs 5.5 crore, gaining the trust’s confidence. Over multiple discussions, they convinced the trust members to pay Rs 1.10 crore in advance, citing administrative expenses and fund processing charges.
Broken Promises and Unfulfilled Commitments
The money was handed over in Noida’s Sector-75, with assurances that the CSR grant would be transferred via RTGS (Real-Time Gross Settlement) within a week. However, days passed, and no funds reflected in the trust’s bank account.
- First Delay: Initially, the fraudsters claimed minor delays and assured that the transaction would be completed soon.
- Repeated Excuses: Over the next few months, they kept postponing the fund transfer, offering multiple excuses.
- Bogus Repayments: After persistent follow-ups, the accused issued two cheques worth Rs 25 lakh and Rs 28 lakh, both of which bounced due to insufficient funds.
- Fake Demand Draft (DD): To further mislead the trust, they later provided an Rs 80 lakh DD, which turned out to be fraudulent.
Realizing they had been scammed, the trust officials approached Noida Police, leading to an official case registration at Sector-113 Police Station.
Police Investigation and Legal Action
Following the complaint, Noida Police have launched a probe, tracking the accused and verifying the financial transactions involved.
The case sheds light on a larger trend of CSR fund fraud, where unscrupulous individuals exploit the system by posing as corporate representatives to cheat NGOs and social organizations.
A senior police official stated, “We have collected evidence and are actively investigating the accused. Action will be taken against those involved in this fraudulent activity.”
The Need for Stronger CSR Fund Regulations
This incident underscores the urgent need for stricter regulations and due diligence in CSR fund allocations. Organizations and trusts seeking CSR grants must adopt best practices, including:
- Background verification of donors and facilitators before accepting funding commitments.
- Legal documentation and formal agreements to prevent financial fraud.
- Secure payment practices, avoiding advance payments without valid contractual obligations.
- Corporate due diligence from both donor companies and recipients to ensure transparency.
By enforcing better oversight and accountability, businesses and trusts can protect themselves from financial fraud while ensuring CSR funds reach deserving causes.
You Learn: A Cautionary Tale for NGOs & CSR Stakeholders
The Noida CSR scam serves as a warning for NGOs, social trusts, and businesses involved in CSR funding. As fraudulent activities rise, it is essential to verify CSR funding sources and avoid unauthorized middlemen claiming to facilitate donations.
With a police investigation underway, the case highlights the importance of financial transparency and vigilance in the CSR sector. As authorities tighten monitoring mechanisms, organizations must adopt strict compliance measures to safeguard against fraudulent CSR dealings.
(India CSR)
