| | Goa to have legislation to pin down fraudulent NBFCs
Sandesh Prabhudesai
18 December 1998
The Congress government has finally decided to issue an ordinance to protect the interest
of depositors investing with the non-banking financial companies, on the lines of legislation
existing in Tamil Nadu. Over 20 such companies have duped thousands of Goans for over
Rs 50 crore in last three years.
The ordinance, which is a replica of Tamil Nadu act, provides for stiff penal provisions like
a fine upto Rs one lakh and imprisonment till ten years to every responsible person of the
financial establishment. It also provides for attachment of property and setting up of special
court to deal with such cases.
The draft ordinance, which was prepared in June, was awaiting a nod from the centre.
Meanwhile, the government set up a special cell to deal with such cases as the
inexperienced officers mess up the whole case, giving enough chance to the NBFCs to get
scot free.
The aggrieved investors however are still critical about the way the local Congress
government is tackling a financial scam, involving union environment minister Suresh
Prabhu belonging to the Shiv Sena, who has allegedly duped around 200 investors for over
Rs 1.20 crore. The police investigations in this case are moving at a snail’s pace.
Several NBFCs have mushroomed in Goa, targeting the Gulf-based NRIs who invest lakhs
of rupees into such NBFCs, for want of attractive rates of interest. They follow a similar
modus operandi by opening posh offices, appointing Goans as managers and commission
agents and win over confidence for at least six months or a year, before disappearing from
the scene.
“Goa does not need any NBFC as the tourist state is having large number of banks offering
good investment deals”, feels chief minister Luizinho Faleiro. While announcing the cabinet
decision regarding the ordinance, he said he would deal with such cases more firmly in
future. The ordinance is expected to be issued within a week.
Rockland Leasing & Plantations Company is heading the list of frauds with an amount of
Rs 17 crore invested by thousands of Goans. Second in the line is the J V J Finance, which
had set up several offices here since May ’96 and attracted deposits of Rs six crore.
Others include Calcutta-based Janapriya with an amount of Rs 1.80 crore, TN-based
Sarvana Credit and Investments Ltd with Rs 1.57 crore as well as Middleman Goa,
Woodstick & Woodstick, Welfare Savings and Credit Ltd, Prudential Capital Market,
Deeplaxmi Green Plantations etc.
Complaints filed before the local RBI office as well as at several police stations indicate a
comprehensive figure of only around Rs 29 crore. But police sources admit that the figure
should be at least double and many more cases are expected to come to light.
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