TBG harboured aspirations of scaling their business.
New Delhi:
Bombay Clay Oven and Saucy Bombay, two Indian restaurants in the US state of Colorado have been accused of defrauding investors of $380,000 or Rs 3,16,56,926 by employing deceptive tactics, including “half-truths and lies,” to lure investors into their ambitious plans for a nationwide expansion. Both restaurants were under the ownership of The Bombay Group (TBG), which partnered with a securities broker named Michael Bissonnette.
TBG, like many others in the competitive restaurant industry of the US, harboured aspirations of scaling their business into a national chain, potentially comprising hundreds or even thousands of outlets. Their strategy involved franchising Saucy Bombay, a newer venture, to capitalise on the burgeoning trend of fast-casual dining.
“The investors in this case really believed in The Bombay Group and their restaurant, Saucy Bombay,” remarked Tung Chan, the state’s securities commissioner. “But as we allege, the investors were not told the truth about the investments and they have not been paid back.”
The lawsuit alleges that TBG’s owners, Marshall and Rohini Miranda, along with Bissonnette, misled investors by portraying their investment as a secure and lucrative opportunity. The plan reportedly guaranteed substantial returns, with dividends as high as 2,900 per cent quarterly.
However, despite the promises, the sole location of Saucy Bombay eventually closed its doors by the end of 2015, unbeknownst to the investors. Despite the closure, funds continued to flow into TBG’s coffers throughout 2015 and 2016, allegedly diverted towards operational expenses, rent, and even self-commissions for selling its own stock.
By the end of 2016, the invested capital had dwindled, with no returns forthcoming to the investors. Although a new Saucy Bombay location opened in 2018, it remained the sole outpost, and the grand franchising plans failed to materialise.
When local media contacted them for comment, both Bissonnette and Marshall Miranda refused to speak.
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