Are you in the process of getting private investment from abroad? Pls read this before you could take any step.
We were contacted by a young entrepreneur for a help on Private Equity allotment for a FII (Foreign Institutional Investor). He needed our help on drafting the Equity Agreement, advising the tax implications, structuring the funding route and so on. He wanted us to incorporate his company after these are structured and made clear.
While talking about his investor, he was mentioning that he got introduced through one of the social networking groups. Every interaction happened between them only via e-mails. The investor seemed to be attracted with this entrepreneur and after analysing the working capital requirements, he decided to invest $62,000 in to this business.
The investor was so genuine in every approach and as promised, he mailed the soft copy of the Equity agreement to our client. The agreement was well-drafted by a legal expert and included the relevant terms. Since it needs a thorough understanding of all terms mentioned, our client wanted us to run it through and let him know our opinion.
In the meanwhile, our client cleverly ran through a check about the potential investor. To our surprise, he found that the entire deal is a scam.
He checked the web site http://scamomatic.com/ and after passing the necessary input details about that investor, he got the following reply.
Please carefully review the following Scam-O-Matic results:
– This email looks like an Advance Fee Fraud (419 scam). You can post it in the online forum of Fraudwatchers.org to find out for sure. Please also see our 419 FAQ. Remember: If something sounds too good to be true, it probably is!
– This email lists mobile phone numbers. Use of such numbers is typical for scams because they allow criminals to conceal their true location. They can receive calls in an Internet cafe from where they send you emails, while pretending to be in some office.
+44 703 XXX XXXX (UK, redirects to a mobile phone in another country)
– Also, the e-mail ID what you have mentioned is a suspicious scam e-mail id.
My client noticed that while the e-mail ID tells a different name, the mail is signatured with another name.
Considering all these, my client concludes that this deal is a suspected scam and hence, he couldn’t proceed.