NEW DELHI: Authorities in Colorado have accused two Indian restaurants of defrauding investors out of $380,000, and they are currently pursuing legal action to get the money back.
The Colorado division of securities has filed a lawsuit against two Indian restaurants, Bombay Clay Oven and Saucy Bombay. The lawsuit claims that the owners, operating under The Bombay Group (TBG), used ‘half-truths and lies’ to persuade investors to fund their ambitious plans for nationwide expansion.However, the invested funds were allegedly spent on rent, operating costs, and Ponzi-like payments, local newspaper BusinessDen reported.
TBG had entered into an agreement with securities broker Michael Bissonnette, and both defendants declined to comment on the allegations when approached, BusinessDen said. The restaurant industry is known for its ambitious expansion plans, and TBG was no exception. In 2014, TBG owned and operated two restaurants: Bombay Clay Oven, a well-established restaurant with over two decades of operation, and Saucy Bombay, a new venture located in a food court.
According to the lawsuit, TBG’s plan was to franchise Saucy Bombay to take advantage of the fast-casual restaurant trend. Tung Chan, the state’s securities commissioner, told the newspaper, “The investors in this case really believed in The Bombay Group and their restaurant, Saucy Bombay.” He added, “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.”
(With inputs from agencies)
The Colorado division of securities has filed a lawsuit against two Indian restaurants, Bombay Clay Oven and Saucy Bombay. The lawsuit claims that the owners, operating under The Bombay Group (TBG), used ‘half-truths and lies’ to persuade investors to fund their ambitious plans for nationwide expansion.However, the invested funds were allegedly spent on rent, operating costs, and Ponzi-like payments, local newspaper BusinessDen reported.
TBG had entered into an agreement with securities broker Michael Bissonnette, and both defendants declined to comment on the allegations when approached, BusinessDen said. The restaurant industry is known for its ambitious expansion plans, and TBG was no exception. In 2014, TBG owned and operated two restaurants: Bombay Clay Oven, a well-established restaurant with over two decades of operation, and Saucy Bombay, a new venture located in a food court.
According to the lawsuit, TBG’s plan was to franchise Saucy Bombay to take advantage of the fast-casual restaurant trend. Tung Chan, the state’s securities commissioner, told the newspaper, “The investors in this case really believed in The Bombay Group and their restaurant, Saucy Bombay.” He added, “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.”
(With inputs from agencies)