Kewal Ahuja SGF: The Hidden Truth Behind a Franchising Controversy

Founded on January 29, 2019, SGF (Spice Grill and Flame) entered the Indian food industry with promises of high returns and rapid expansion. Led by Kewal Ahuja, the brand quickly gained traction in the franchising sector, attracting numerous investors and aspiring entrepreneurs. However, behind the glitzy façade lies a tale of alleged financial mismanagement, regulatory non-compliance, and investor grievances.

This article explores the rise of SGF under Kewal Ahuja’s leadership, the controversies surrounding the company, and the impact on franchisees who invested in the brand’s promises.

SGF Scam: Financial fraud and broken promises under Kewal Ahuja's leadership.

The Rise of Kewal Ahuja SGF

Kewal Ahuja, who also serves as the Treasurer of BJYM Delhi Pradesh, positioned SGF as a lucrative franchising opportunity in India’s booming food industry. The company offered a compelling business model, promising quick returns and sustainable revenue for franchisees. With India’s franchising sector projected to grow at 30-35% annually, reaching $100 billion by 2024, SGF appeared to be a golden opportunity.

However, recent revelations suggest that SGF’s success story is marred by questionable practices. A detailed analysis of SGF and its sister concern, Spice, has exposed potential fund misappropriation and statutory irregularities.

SGF and Spice: The Connection

One of the most striking findings is the relationship between SGF and its sister concern Spice:

·         Shared Address: Both companies are registered at the same address.

·         Common Leadership: Kewal Ahuja serves as the key managerial person for both entities, making them related parties.

·         Contrasting Financial Records: While SGF has consistently reported NIL returns in GST and income tax, Spice has shown steady growth:

o   2017-18: INR 1.26 crore

o   2018-19: INR 2.54 crore

o   2019-20: INR 2.70 crore

This discrepancy raises suspicions of fund diversion between the two companies, with Spice potentially serving as a conduit for misappropriated funds.

SGF’s Statutory Non-Compliance

SGF’s operational history reveals a troubling pattern of regulatory non-compliance:

1.      Income Tax Evasion: SGF has not filed income tax returns for the past three years, despite collecting franchise fees from investors.

2.      GST Irregularities: SGF applied for three GST numbers (in Delhi, Haryana, and Mumbai), but only the Mumbai GST number remains active. Even so, no returns have been filed since September 2021.

3.      MCA Filings: SGF has failed to file annual returns and financial statements with the Ministry of Corporate Affairs (MCA) since its incorporation.

4.      Auditor Resignations: SGF’s first auditor resigned within months, and the second auditor, appointed in December 2020, also failed to produce financial records.

These irregularities not only violate statutory requirements but also point to possible malicious intent to h     ide financial activities.

Franchisees Speak Out

Multiple franchisees have alleged fraud, claiming that SGF failed to deliver on its promises of high returns and sustainable revenue. Reports suggest that franchise fees collected by SGF were not accounted for in regulatory filings, leaving investors in the dark about the company’s financial health.

Adding to the controversy is Ahuja’s use of paid PR campaigns to maintain a clean public image. His political influence as BJYM Treasurer has further helped suppress negative press and investor complaints.

Lessons for Aspiring Franchise Investors

The controversy surrounding Kewal Ahuja SGF serves as a cautionary tale for franchise investors. Here are some key takeaways:

·         Verify Financial Transparency: Scrutinize GST, income tax, and MCA filings before investing.

·         Assess Regulatory Compliance: Ensure the company adheres to all statutory requirements.

·         Seek Independent Advice: Consult legal and financial experts to evaluate franchise agreements.

The Future of SGF

With its mounting allegations and history of non-compliance, SGF faces an uncertain future. Regulatory bodies may take action if the company fails to rectify its lapses, and franchisee complaints could lead to legal challenges.

For now, Kewal Ahuja SGF remains under the spotlight, a reminder of the risks involved in the franchising business. Aspiring investors must exercise caution and diligence to protect their hard-earned money from falling into similar traps.

Stay informed, stay cautious, and safeguard your investments.