I wonder, if your query pertains to some real problem!
Your question, "is the HR not giving the true story," also indicates as if you consider the members of CiteHR, as astrologers or the spokespersons of that MNC, which rejected your candidature, to predict or inform you by prediction or on behalf of the HR of that company.
About your other question, "is it possible to reject a candidate due to this reason," your object of asking is not clear, as to how you can gain anything by knowing whether the company is justified or not to reject your candidature. The question arises, even if someone tells you that the action was not justified, what do you propose to do against that company, and if you want to take any action against the MNC, it is not clear, why you are so particular to join that very company, when the company has not put any faith on you, your past service and your last company, which you believe to be not a scam?
You should know the only thing that an employer has the discretion to accept or reject the candidature of any candidate, in the interest of his organization. Nobody can compel the company to recruit you, even the court of law, if you file any case against that MNC.
To be frank, even your user ID, "CITE11" gives some doubt as if you are not a serious user of the services of the CiteHR, and may just be putting your unwarranted questions by wandering through several such sites with different user IDs, like CITE1, 2, 3 ... 11 & so on. Your anonymity could have been much better than such type of user ID to create trust in your seriousness to seek answers to your real problems, if there be any..
Your question, "is the HR not giving the true story," also indicates as if you consider the members of CiteHR, as astrologers or the spokespersons of that MNC, which rejected your candidature, to predict or inform you by prediction or on behalf of the HR of that company.
About your other question, "is it possible to reject a candidate due to this reason," your object of asking is not clear, as to how you can gain anything by knowing whether the company is justified or not to reject your candidature. The question arises, even if someone tells you that the action was not justified, what do you propose to do against that company, and if you want to take any action against the MNC, it is not clear, why you are so particular to join that very company, when the company has not put any faith on you, your past service and your last company, which you believe to be not a scam?
You should know the only thing that an employer has the discretion to accept or reject the candidature of any candidate, in the interest of his organization. Nobody can compel the company to recruit you, even the court of law, if you file any case against that MNC.
To be frank, even your user ID, "CITE11" gives some doubt as if you are not a serious user of the services of the CiteHR, and may just be putting your unwarranted questions by wandering through several such sites with different user IDs, like CITE1, 2, 3 ... 11 & so on. Your anonymity could have been much better than such type of user ID to create trust in your seriousness to seek answers to your real problems, if there be any..