Fraud Alert: Tata Restart, a Ponzi, Collective Investment Scam Misusing Names of Tata, Sudhir Sethi
Updated at 9.45pm on 2 March 2024 to show that the portal even mischievously uses the name and photos of Sudhir Sethi, founder and chairman of Chiratae Ventures
 
The duck test is a form of abductive reasoning that implies that a person can identify an unknown subject by observing that subject's habitual characteristics. The same test can be applied to Ponzi schemes, multi-level marketing (MLM) or collective investment schemes (CIS). After observing and writing on these for years, we can say, "If it looks like a Ponzi, operates like a Ponzi, and shows huge returns like a Ponzi, then it probably is a Ponzi." 
 
One such Ponzi scheme making the rounds is Tata Restart (www.tatarestart.com), which not only misuses the Tata brand name but also mischievously uses images of former group chairman Ratan Tata, to promote a typical get-rich-quick investment plan. Moneylife received this information from Pranjal R Daniel, who runs a website called Strategy India, which offers consultancy on direct selling. Mr Daniel had also copied the Tata group's IDs and several police officials to alert them about the misuse of the group name.
 
Tata Restart shows that it is promoted by Bengaluru-based Sudhir Sethi. However, Mr Sethi, founder and chairman of Chiratae Ventures, is not related to this portal. Like Mr Tata, his name and photos are fraudulently used by the operators behind Tatarestart.com to gain credibility.
 
A representative of Mr Tata confirmed that Mr Tata's name is fraudulently used by Tata Restart.
 
Like a Ponzi scheme, Tata Restart promises high returns to investors with little or no risk involved. Like a typical MLM, it also offers incentives for recruiting new participants into the scheme.
 
Interestingly, Tata Restart claims to reached 7,000 children and "aims to reach 30,000 children, reconnecting them with education and empowering them to reimagine their future". But then, like a typical MLM, this is also just a big talk, and Tata Restart immediately jumps to its seven packages for investment. 
 
Tata Restart is collecting Rs2,500 to Rs5 lakh as an investment from the public. It promises to repay Rs50 per day for 100 days to Rs11,000 daily for 150 days, a 100% - 300% return on investments! Further, there are 'attractive' offers to win top-selling cars, including BMW 3 Grand Limousine and Range Rover! 
 
 
For its lowest package, if the investor 'invests' Rs2,500, Tata Restart promises to repay Rs50 per day for 100 days or Rs5,000, double returns in just 100 days. For the highest package, the investor needs to invest Rs5 lakh to receive Rs11,000 per day for the next 150 days. It amounts to Rs16.50 lakh, more than three times the investment in just 150 days!
 
 
Obviously, such high returns are too good to be true. Had it been possible,  the wealthiest people would have simply invested money in Tata Restart and become richer without doing anything.  
 
There is a QR code on the Tata Restart website which is used for making payments. The description above the QR code says, "After submitting the payment's screenshot, you will get the fund between 30 minutes."
 
The QR code is associated with Equity Capital Advisors India Pvt Ltd from Mulund, Mumbai. Equity Capital Advisors is not registered with the Securities and Exchange Board of India (SEBI), which regulates collective investment schemes-CIS in the country. Also, the website offers no clarity about the relationship between Tata Restart and Equity Capital Advisors.
 
There are a few more red flags for discerning investors. First, the address of Tata Restart is listed as 'Near Allahabad Bank, Distt. Sonprayag, Uttarakhand' – it does not disclose the name of the town. Also, when Tata Restart has its own website, why does it display the email ID [email protected] below its address?      
 
Almost all Ponzi, MLM or CIC schemes (scams) typically generate profits through money collected from new investors rather than investment or business activities. These schemes are unsustainable because they rely on a continuous influx of new investors to keep them afloat, and no legitimate profits are generated to sustain the promised returns.
 
Such schemes usually collapse when there are not enough new investors to pay returns to earlier investors or when the operator decides to abscond with the remaining funds.
 
Some MLMs claim that they earn money through their own sales of products or services. However, most of them 'encourage' recruiting new participants into the scheme to earn additional commissions from new recruits' sales, commonly called downlines or legs. Participants (read: investors) are typically required to purchase a starter kit or a certain amount of inventory to join the scheme, and they may be pressured to recruit others to do the same.
 
Further, all these Ponzi, MLM and CIS schemes often involve complex compensation structures that may make it difficult for participants to earn significant profits unless they recruit large numbers of new members. Even here, Tata Restart shows binary (read: new recruitment) at 10%, with a total deduction of 15% and per day capping at Rs35,000. In short, the top person (typically the operator or promoter and close associates) can earn Rs35,000 per day from its downlines. 
 
We contacted the PR representative of Mr Tata about the scheme misusing his name and photograph. If we receive any response from the Tata group about the action taken, it will be added to this column.  
 
According to Robert FitzPatrick, president of US-based Pyramid Scheme Alert, these schemes are an 'endless chain' or a 'pyramid scheme'. "I believe this form of fraud is a clear danger to national economies. They subvert efforts to accumulate wealth. They divert energy and funds from real businesses. They often divert people from seeking more education with their promises of fast wealth. They destroy the savings and equity of lower-income people. They confuse people as to what a legitimate value-based business is. Calling it a business does not make it so. A real business requires an exchange of value."
 
Moneylife has, for long, been exposing Ponzi schemes, MLM companies, money circulation schemes, pyramid-marketing schemes and other similar companies that defraud the unwary public by offering them misleading inducements and depriving them of their hard-earned savings.
 
Remember, all these Ponzi, MLM, CIS or pyramid schemes can dupe people by promising high returns or lucrative opportunities with little effort or risk. They often rely on persuasive tactics, such as testimonials from supposed successful participants or misleading marketing materials, to attract new investors or recruits. Once the schemes collapse or fail to deliver on their promises, many participants lose their investments or find themselves unable to recoup their losses. It is a universal truth that nothing comes free in the world, especially money. 
 
Moreover,  there is no easy way for victims of Ponzi, MLM, CIS or pyramid schemes to get back their investments. The victims need to approach SEBI, the ministry of corporate affairs (MCA) and the local police station or economic offences wing (EOW). 
 
Update:
In an email, TCM Sundaram, founder and vice chairman of Chiratae Ventures, says, "Tata Restart website is not just misusing the Tata name, it is also misusing Sudhir Sethi's name, data and pictures fraudulently. Mr Sethi is not in any manner whatsoever associated with 'Tata Restart', 'TATA RESTART | Let's Restart The Brighter Future or www.tatarestart.com' or the persons or entities operating these platforms or similar platforms - this is a clear case of identity theft by the persons operating Tata Restart."

"While we are taking necessary legal steps against 'Tata Restart' website on behalf of Mr Sethi, given the reputational damage that could be caused to Mr Sethi on account of the false and fraudulent use of his name, data and pictures, we request you to please correct the article stating that the 'Tata Restart' website is misusing even Mr Sethi's name and credentials in addition to Tata's name," Mr Sundaram says.

In 2006, Mr Sethi, along with Mr Sundaram, set up IDG Ventures, which was rebranded to Chiratae Ventures in 2018. Chiratae Ventures currently has an asset under management (AUM) of about US$1.2bn (billion) under management. It has been a first or second investor in marquee companies like Lenskart, Myntra, FirstCry, Cult.fit, and PolicyBazaar.
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