Rahul Dravid, nicknamed The Wall, is a legend for his studied and meticulous approach to the game of cricket—as a player, captain and coach. Prakash Padukone had a similar reputation. Wouldn’t you expect them to show the same approach to their hard-earned savings? So imagine our shock to find that Rahul Dravid was duped of Rs4 crore by a ponzi scheme, peddled to him by a sport journalist, Sutram Suresh, who clearly had his trust. Isn’t that like going to a dance class to learn cricket? Would Mr Dravid or Mr Padukone have made that mistake?
The key to this strange decision is in the quote by a police source reported by various newspapers. It says, the scheme promised a return of 30% to 40% and that made all the difference. Among the other victims was young Saina Nehwal, who had once said that her father handled her finances and invested them in insurance. As it happens, the journalist who conned these sports stars was also an insurance agent.
His company has allegedly scammed 800 people of around Rs300 crore and, on Mr Dravid’s complaint, scamster Raghavendra Srinath, the journalist Suresh, and many others have been arrested. But will the money come back? It rarely does, in ponzi schemes.
Anyone who has attended a Moneylife seminar knows our simple rule of thumb: if someone offers you a fixed-income return that is 3% above that of a bank term deposit, it is a red flag. Gifts and pass-backs from distributors/agents are also a red flag. We also say that the trick to luring people into a ponzi scheme is to make quick initial payments of the high returns that are promised. Here, too, Mr Dravid says that the scamster paid the promised returns, initially, but stopped paying after 2017. But that is exactly how ponzi schemes work. Strangely, Mr Dravid is related to luminaries in the financial world, but has apparently not bothered to seek guidance on investment.