This Businessman Who Once Ran 1,600 Retail Stores Worth Rs 3,500 Crore Is Now in Jail for a Rs 137 Crore Scam
This Businessman Who Once Ran 1,600 Retail Stores Worth Rs 3,500 Crore Is Now in Jail for a Rs 137 Crore Scam
CR Subramanian was once seen as a symbol of entrepreneurial excellence in India. An alumnus of IIT and IIM, he rose to prominence by founding Subhiksha, a discount retail chain that at its peak operated 1,600 stores across India and was valued at Rs 3,500 crore. But his legacy now lies in ruins Subramanian is currently serving a 20-year prison sentence for orchestrating a large-scale financial fraud.
The Rise of a Retail Empire
Subramanian’s career began in 1991 with the launch of Vishwapriya Financial Services, a non-banking financial company (NBFC). Through high-return schemes like “Prime Invest” and “Safety Plus,” he attracted nearly 600 investors, lured by promised returns of 15–20%.
In 1997, he shifted focus to retail and founded Subhiksha, a chain offering everything from groceries to mobile phones at competitive prices. The business model, based on low margins and high volumes, quickly gained traction. By 2008, the chain had spread nationwide, drawing investments from prominent backers like Azim Premji and ICICI Ventures.
A Hidden House of Cards
Despite outward success, trouble brewed beneath the surface. Investigations later revealed that Subramanian was illegally diverting funds from Vishwapriya to Subhiksha without investor approval. To maintain appearances and pay earlier investors, he used money from new ones a classic Ponzi scheme structure.
To further mask the growing financial crisis, he created over 80 shell companies, manipulated records, and falsified accounts. By late 2008, the retail empire collapsed. Salaries went unpaid, suppliers pulled out, and investor confidence evaporated. Subhiksha shut down entirely by 2009.
Legal Consequences
In 2015, the Economic Offences Wing initiated legal action. The Enforcement Directorate arrested Subramanian in 2018 for money laundering. In November 2023, a special court in Chennai found him guilty under the Tamil Nadu Protection of Interests of Depositors (TNPID) Act.
The Sentence
- 20 years in jail for Subramanian
- Rs 8.92 crore fine imposed on him
- Rs 191.98 crore in penalties slapped on his companies
- Rs 180 crore of this set aside for refunding duped investors
A designated authority will now process claims and oversee compensation distribution to affected investors.
The Lesson
Subramanian’s story is a grim cautionary tale. It highlights how even the most celebrated business figures can fall if ethics are abandoned. For India’s growing startup and investment community, it’s a stark reminder: impressive growth and returns must always be scrutinized because not everything that glitters is gold.
