New Delhi. The Economic Offenses Wing of Mumbai Police has registered a case of alleged fraud of Rs 90 crore in Pravog India Limited. It has been alleged in the complaint that the real value of the company was deliberately shown low so that it could be bought at a very low price.
This case is from 2018 to 2023 when the company was under financial pressure and the value of its assets was falling rapidly. Nikhil Chaturvedi, former managing director of Pravog, has alleged that some former officials and new buyers together delayed the auction of the company for two years and stopped recovery from debtors, due to which the company suffered huge losses.
What does the investigation say?
According to the investigation, former director Rakesh Rawat and ex-employee Sameer Khandelwal, along with resolution professional Amit Gupta and new buyer Arjit Khandelwal, deliberately valued the company’s assets at a low price. EOW says that by stalling the auction for two years, the market value of the company was allowed to fall further so that the buyers could benefit. During this period, recovery of crores of rupees from clients was also stopped due to which the cash flow of the company got disrupted. According to the police, all this delay and disturbance was not due to any administrative reason but as part of a well-planned conspiracy.
investigation ongoing
Mumbai EOW has imposed sections of cheating, criminal conspiracy and criminal breach of trust on all the accused. At present the investigation is going on and the police believe that as the investigation progresses, more layers of the company’s losses and wrong decisions will be revealed.
What is Pravogue India Limited?
Pravogue India Limited is a Mumbai-based fashion and lifestyle company that manufactures and sells apparel, accessories and luggage products for men and women. In the 2000s, Pravog became quite popular due to its urban style, colorful campaigns and brand visibility. Its brand took off very fast among the urban youth and for some time it was counted among the top brands of the Indian fashion market.
company business model
The work of the company was divided into two big parts. First, its in-house design and manufacturing model, where the company manufactured the products itself. Second, retail stores in malls and high street locations, where products were delivered directly to customers. Along with this, the company was also active on the e-commerce platform and did good business from online sales.
brand identity
Pravog was recognized as a trendy, modern and budget friendly fashion brand. Its campaigns were run with many Bollywood actors and cricketers, which gave the brand recognition at the national level. For a long time, it was a brand included in the wardrobe of the youth.
company decline
After 2015, financial pressure started increasing on the company. Increasing competition in the retail sector, e-commerce discounting and continuously increasing operational expenses affected the financial health of the company. Many stores closed and debt increased. Gradually the market share of the company kept falling and the physical presence of Pravog kept decreasing.
Insolvency and new controversies
After increasing debts and declining business, the company went into insolvency process. During this period, many controversies came to light regarding valuation and auction of assets. Recently, Mumbai EOW has registered a case on the complaint of deliberately undervaluing the company’s assets and delaying the auction. In this, serious allegations have been made against the former director and some old employees.
today’s situation
Today Pravog is not visible in the market in its old form. The company’s brand and its assets are likely to go into the hands of new buyers after the insolvency process. This brand does not have the same presence in the market as before, but it was once a strong name in the fashion industry.
