The Ministry of Corporate Affairs said it had ordered a probe into the books and records of Royal Twinkle Star Club (RTSC), a holiday plan company owned by Mumbai-based Mirah group.
According to a recent ministry note, the probe was ordered in February and is being conducted by the regional director, Mumbai, where the company is registered. Recently, MCA has also sent a reminder asking the Regional Director to expedite the probe and submit a
report early. The holiday solutions firm, headquartered in Mumbai, has a significant presence in Maharashtra and Gujarat, with Mumbai and Pune being principal centres. RTSC’s promotional materials said that it offers customers “a variety of Holiday Plans to choose.”
The plans are based on the “Internationally famous Points System.”
Apart from RTSC, Mirah group runs hotels under the name Citrus and retail food outlets such as Rajdhani, Mad Over Donuts and Falafels.
Investor groups have raised concerns as the holiday plans have an option for redemption of the subscription amount. This, according to them, is being used by the company and its agents to woo potential investors. “Not many people are keen on these holiday plans. They
are being wooed on the promise of huge returns. The company says it follows a points system. But, each point is equivalent of Rs 100. People who do not want to avail of holiday plans are redeemed their money with interest. This is nothing but deposit mobilization,” Bhupendra Singh of Mumbai-based investor group Investors and Consumer Guidance Society.
According to Singh, while several companies including listed firms offer such plans, none of them offer redemption of cash. “In most cases, if you do not avail the time share within a particular period, it expires. But, here it does not, it can be redeemed in cash. That is
where the problem is,” he added.
In a complaint to the Registrar of Companies in Mumbai, the society said its members were approached by agents of RTSC, who “guaranteed returns of 1.5 times in 4 years, 1.7 times the investment in 5 years, double in 6.5 years and 3 times in 9 years.”
However, the company denied knowledge of any probe by the MCA. “First of all, we are not aware of any such inspection ordered by the Ministry of Corporate Affairs. However, we are regularly subjected to corporate audit, tax audit and other scrutiny,” Omprakash Goenka,
chairman and managing director of Mirah group that owns Royal Twinkle said in an email
response.
Goenka said RTSC was marketing holiday plans by subscription to the membership offers, but not collecting deposits. According to him, the points mentioned in offer documents are reward points as offered by any credit card company or airline company as bonus reward points.
