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NRI-based in Saudi Arabia and Indian entrpreneur in multi-crore racket

NRI, K. P. Jayaram from Saudi Arabia and Indian Vijay Raghunath Singh (35). MBA graduate from Administrative Management college, Jainagar, Bangalore mastermind to collect money by appointing agents and distributors. In July, 2004 State Trading Corporation entered into a Rs. 100 crore tie-up with India Household and Healthcare Ltd (IHHL) for importing LG Care personal products. It is estimated that over 600 people were duped and the scam was worth nearly Rs 100 crore

‘MNC agent’ held for multi-crore fraud

Express News Service

New Delhi, December 5, 2005
Express News Service

With the arrest of one person, the Delhi Police claim to have unearthed a multi-crore racket where four persons cheated unsuspecting businessmen of crores of rupees by floating a company claiming to be agents of the Korean firm M/s LG Care.

In March 2004, the complainant came across an advertisement by a company, India Household and Health Care Ltd (IHHL). The company claimed they were the sole licensee of LG Care for marketing household and healthcare products in India and would soon be appointing agents and distributors.

The complainant met the director of the company and the accused, Vijay Raghunath Singh (35), several times, the police said.

‘‘Singh told the complainants that after appointing them as state director- cum-Clearing and Forwarding agent IHHL would place goods of LG worth Rs 2 crore at their disposal. The complainant was also assured that IHHL would also get rights to market other international brands like Rothmans, Hyundai Telecom and Eurolife,’’ said the police.

The firms were told that IHHL would spread business to Rs 300 crore per month. Following this, the complainant’s firm paid Rs 1.5 crore to IHHL, the police said

The complainants were promised that goods worth Rs 3 crore would be supplied every month and goods worth Rs 2 crore would be stored in their godowns. But the goods turned out to be inferior and less than the promised quantity. In December 2004, IHHL was asked to settle the dues but only assurances were given, the police said.

In August 2005, the police registered a case against the accused. Investigations showed that LG had moved court banning IHHL from using their logo and trademark since September 2004, and had initiated action against its own employees who had been hand in glove with the accused.

Police found that Singh was an MBA graduate from Administrative Management college, Jainagar, Bangalore. In 2003, he met one K.P. Jairam, an NRI-based in Saudi Arabia. Both decided to form IHHL with their wives Shobha Jairam and Aishwarya Singh. The accused then, in connivance with some officials of LG, procured a MoU dated November 2 2003, which was later used by them to dupe businessmen.

Police suspect the Jairam couple fled the country. Investigations show the accused had duped eight other business concerns. So far, the cheated amount is more than Rs 2 crore but officers suspect that the amount would run into several hundreds of crores.

LG Care enters the Indian FMCG market

April 15 2004:

Plans aggressive growth in india and targets a sales turnover of 150 crores in the very first year of its Indian operations
Plans to expand into all Metros, Mini-metros & towns with a population of over 100,000 by July 2004
Will be initially introducing 200 (SKUs) consumer products across 8 categories
Will be present across the country within first 3 months of the launch
LG Care debuts in the Indian FMCG market through a sole licensee agreement with India Household and Healthcare Ltd. The company also announced the introduction of its premium consumer products across 8 categories including toothpastes, shampoos, soaps, detergents, diapers, cleaners, cosmetics and hairstyling products. There will be 200 product packs spread over the mentioned categories in various sizes, packs and variants.

Mr Vijay R Singh, Managing Director, said, "India is about to witness an FMCG revolution with the entry of the Korean chaebol in India. LG Care's commitment is to offering world-class products to help the individual's quest for happy living through healthy, clean and beautiful life. LG Care will provide consumers a wide choice of premium consumer products at reasonable prices. By entering India LG Care has brought the Indian consumer closer to becoming a global citizen.

Our mission is to create an Indian operation benchmarked with LG Care internationally and be a formidable force as a FMCG major across key consumer product categories. Our vision is to bring global standards of good living to our Indian consumers."

Initially LG Care India estimated a turnover of 100 crores in the first year of operations but it has been up scaled to a sales turnover of 150 crores by the year-end owing to the market response and encouragement. The company will be present in all the markets nationally in 3 months time. LG Care products will be available in all cities and towns with a population of 100,000 and above.

The company has planned an aggressive marketing, advertising and promotions campaign. Like in all its activities, the company is looking at an innovative mix of advertising, direct marketing, events and promotions to establish a close and long-term relationship with the Indian consumer. The company also has a strong research focus to be able to generate valuable consumer feedback and inputs for the company.

About LG Care:
LG Care's international range of Fast Moving Consumer Goods (FMCG) enters India through a sole licensee agreement with India Household and Healthcare Ltd (IHHL). LG Care forays into the Indian market with over five decades of International Expertise in the Healthcare, personal care and grooming industry, all this with the strong parentage of the "LG Equity" in India, which is synonymous for superior quality, revolutionary technology & Constant Innovation.

Internationally LG Care had been incorporated long before their foray into electronics business. LG Group was established in 1947, the second largest conglomerate in Korea & currently operates in over 120 Countries globally. LG Household & Healthcare Ltd is one of the 42 companies under the LG group.

LG Care internationally has over 200 high-quality consumer products in over 20 FMCG categories. From ultra-whitening toothpastes, enzyme-based detergents, multi-action ion-silk treatment shampoos to nature-based skin-care soaps, the list of technologically advanced products is endless. All of which are manufactured at their state-of-the-art factories spread across 200 acres of land in Korea.

LG has so far dedicated over Rs. 9000 crore to product innovations. The brilliant R&D team has consistently won a host of international awards for their product technology. The very same technologically advanced LG Care's range of products that most of the consumers in advanced countries have been using, will be available in India at affordable prices.

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Multi-crore racket

IHHL's Chairman NRI, K. P. Jayaram, State Trading Corporation' Chairman and IHHL's Managing Director Vijay R. Singh launched of LG Care products such as soaps, shampoo, detergents, diapers, hair-styling products, cleaners and toothpastes targeting a turnover of Rs. 500 crores in 2004