- Sunday, May 05, 2024
It was claimed that the owners of the two restaurants used deceptive tactics to entice investors into supporting their business plans and spent their money on rent, operating costs and Ponzi-like payments, a local outlet reported.
By: Shubham Ghosh
A COUPLE of Indian restaurants in Colorado, US, stand accused of deceiving investors out of $380,000, state regulators have claimed.
The Colorado Division of Securities has claimed that the proprietors of Bombay Clay Oven and Saucy Bombay used “half-truths and lies” to entice investors into supporting their ambitious nationwide expansion plans. The accused then spent the investors’ money on rent, operating costs and Ponzi-like payments, local newspaper BusinessDen reported on Wednesday (24).
The two restaurants, owned by The Bombay Group (TBG), entered into an agreement with securities broker Michael Bissonnette.
Both defendants declined offers to discuss the allegations with BusinessDen, the daily reported.
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Like many in the restaurant industry, TBG had grand plans to expand its business into a nationwide conglomerate, with hundreds or even thousands of locations.
In 2014, TBG owned and operated two restaurants: Bombay Clay Oven, a restaurant that had operated for more than two decades, and Saucy Bombay, a new endeavour with a single location in a food court. TBG’s plan was to franchise Saucy Bombay in order to capitalise on the fast-casual restaurant trend, the lawsuit said.
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“The investors in this case really believed in The Bombay Group and their restaurant, Saucy Bombay,” Tung Chan, the state’s securities commissioner told the newspaper. “But as we allege, the investors were not told the truth about the investments and they have not been paid back. If you have invested with The Bombay Group, please contact the Securities Division right away,” he said.
(With PTI inputs)
