Highrich Controversy In Kerala: All You Need To Know
Anil Akkara, former Congress MLA in Kerala, is on a mission now. For the last one week, he has been holding press conferences in Kerala’s Thrissur, where Prathapan K Das, the director of the multi-level marketing company Highrich Online Shoppe Pvt Ltd, was recently apprehended by the Kerala GST officials. According to reports, Prathapan, who, along with his wife Sreena Prathapan, runs the Highrich company, was arrested by the GST intelligence wing for alleged tax evasion amounting to Rs 126 crore.
In the press conference held on Sunday, Anil Akkara, an executive committee member of the Kerala Pradesh Congress Committee and All India Congress Committee, alleged that the company, which allows individuals from any part of the country to invest in the company by purchasing a voucher it offers, swindled money equal to the state’s budget for a financial year after the issuance of certain bonds.
As per Highrich member accounts, investors can use the voucher to buy goods from supermarkets that the company has either established or made agreements with for partnership trade. When someone buys a wide variety of groceries, fruits, vegetables, rice, flour, spices, cleaning supplies, personal care products, and kitchenware that Highrich online or its supermarkets offer using the voucher, the investor gets an amount as a profit share.
Highrich: What is the latest controversy?
On November 24, according to reports, the GST intelligence Kasaragod unit raided the Thrissur Arattupuzha office of Highrich Online Shoppe based on information of evasion of GST to the tune of Rs 126.54 crore. The GST intelligence’s claim was that Highrich suppressed a turnover of Rs 703 crore, and the company was supposed to pay Rs 126.54 crore. Based on this initial input, the GST office summoned company directors Prathapan and Sreena K S to the office of the deputy commissioner (intelligence) Kerala GST in Thrissur on November 30.
Highrich management paid Rs 1.5 crore on November 24 and another Rs 50 crore on 27, soon after the GST intelligence wing’s search in their premises. It did not stop there: the state GST office imposed a 15% penalty on the company for suppressing the turnover, and still Rs 75 crore was pending as a liability to the tax office. Prathapan was arrested in the first week of December and remanded in judicial custody by the Ernakulam Additional Chief Judicial Magistrate (Economic Offence) Court.
Days after that, last Thursday, Thrissur Collector Krishna Teja ordered the attachment of properties of Highrich, based in Arattupuzha, and its owners.
On the whole controversy, Anil Akkara has revealed several other communications by the state’s police department, on his Facebook profile.
On November 21, Sanjay M Kaul, the finance secretary of the Kerala government and the competent authority responsible for the Banning of Unregulated Deposit Schemes (BUDS) Act, sent an order to the state police chief and various other departments in the state. The order directed them to attach all properties and deposits held by Highrich, along with any money or other property acquired either in the name of Highrich or in the name of any other person on behalf of the deposit taker, the company.
Mr. Kaul”s order was based on a case registered in Thrissur’s Cherpu police station regarding a complaint against the directors of Highrich Online Shoppe PVT Ltd, Prathapan and Sreena Prathapan. The complaint alleges that they have been accepting deposits from the public, offering returns by leading them to believe that by remitting Rs 750 or Rs 10,000, they can enroll as members and receive dividends and other benefits after a fixed time period or on a monthly basis.
The order stated that the deposit-taking is akin to a money chain model, which is a punishable offense under the Prize Chits and Money Circulation Schemes (Banning) Act. “A prize chit or a money circulation scheme banned under the provisions of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978 (43 of 1978) shall be deemed to be an Unregulated Deposit Scheme under the BUDS Act also,” the order mentioned.
The order also directed the Inspector General of the Registration Department to freeze the sale, mortgage, or any other transaction of immovable properties of the firm and the deposit taker. Similarly, the order directed the transport commissioner, the lead bank managers of banks and cooperative societies, general managers of KSFE, district managers of Kerala Financial Corporation, and the district collectors to undertake necessary actions in regard to the case.
Mr. Anil Akkara alleges that Highrich has sourced Rs 15,000 crore by issuing mortgage capital bonds without any authorization from the government, SEBI, or the Reserve Bank of India for their OTT platform HR OTT.
View this post on Instagram
What is Highrich?
This reporter has met many Highrich members on numerous occasions. They all talk about one thing: “The more you share, the more you gain.” Though the promoters and many agents of the company deny that the basic nature of the company is that of a Multi-Level Marketing (MLM) company, when it comes to practice, Highrich functions as an MLM company but with a larger presence of online and supermarket outlets.
Highrich’s official version of the business model is as follows, as written on its website: “Highrich functions by connecting people. It relies on the traditional marketing system of “word of mouth” to reach out to new customers. Each of our customers has the privilege to save as they buy and earn as they connect. We have designed a system where the profits are shared with our customers, associates, and other affiliates to address their contribution to keeping the ecosystem alive.
“There is a saying that goes, ‘The more you share, the more you gain.’ With intelligent use of technology, the wise old saying can hold true even in this age of money-driven fast-paced life.”
Many Highrich members will tell you a story of survival on how the company turned out to be what we see now. It is to Covid-19. According to the top leadership and new members of the company, the story is: when the world was hit by Covid, we were all locked inside our own houses. Then Highrich offered all products through online and WhatsApp sales to each household and established a connection with each customer in which the seller and the customer started sharing the profit and product.
From there, the company expanded the number of products it sells online as well as the supermarket chains where the Highrich product are sold.
How Highrich Works
Soon after one of the Highrich directors, Prathapan K Das, was arrested, Sreena Prathapan, CEO and another director in the company, went live with a local media house detailing her side of the story in connection with the company.
Sreena has been a familiar face for many in Kerala’s social media space for the last couple of years since the company started to become the talk of the town. She was seen at all the major events of Highrich where the company announced its biggest achievers and new strategies. A social media or Google search will provide details of how popular she is. Some latest updates will get you the details of Highrich’s latest venture – HR OTT, through which the company aims to tap in 3 crore subscribers with a subscription fee of Rs 1,500 per person. HR OTT has already garnered enough attention after it has got rights of some notable Malayalam releases to the platform.
View this post on Instagram
During the interview, Sreena talked about what was happening. “We have paid Rs 48 lakh GST in the last month, and we have also released our audit report,” she said.
According to Sreena, Highrich is a supermarket chain that gives an 18-level income to members and customers (if you talk to a Highrich member, you will understand the concept of ‘18-level,’ something similar to what is familiar as MLM income).
“Highrich currently has 679 supermarkets, and we don’t have any products of our own… Highrich has more than 2,100 firms, and they all are paying GST to the government, serving 1.79 crore customers. We are not an MLM, but it is a Multi-Level Mercantile company. We are operating in 98 countries,” she adds.
Here’s what Sreena has to say about the business model: “Highrich has a Rs 10,000 redeem coupon or purchase advance coupon. If you want to buy products from us, you may need to buy a redeem coupon worth Rs 10,000 first. It”s almost similar to Amazon wallets. There will be a 20% discount for this coupon when you buy a product from any of Highrich”s outlets. Along with this, when we distribute the profit each month, they will be given a share of the profit between Rs 100 and Rs 110. If one of our supermarkets gets a profit of Rs 1 Crore a month, out of which the company will keep 20 lakhs, and the rest will be given to the customers.”
She claims that the reason behind the latest developments is the “change Highrich has brought in the lives of these many people” and the “jealousy” caused by the popularity of the company.
It”s not just Sreena who talks about the ‘jealousy.’ Many members of the company have also said this. “Look, I received 68,000 in my account last week. My wife has also got something similar to that. This is the power of Highrich. Having a five-digit balance in my account some years back was merely a dream for me…” said a member who does not want to be named.
“All these things are happening because of the fear and jealousy of other MLMs and supermarket chains. Politicians are also working 24×7 against Highrich because we are a large group. The empowerment of such a large group is always a problem for politicians. So, after joining hands with other business groups, these politicians are trying to destroy our livelihood,” said this person who himself is a member of a political party in Southern Kerala.
Sreena is confident that Highrich will sail through this storm. “My husband is a God to many. He will come back. Their God will come back. We share 75 percent of the profit with 18 levels of our members. My husband’s model is: there is a difference of 1 person investing Rs 100,000 and 100 people investing Rs 100.”
