Suresh Prabhu involved in bank scam

Sandesh Prabhudesai
26 April 1998  

Now it is the turn of union environment minister Suresh Prabhu, the sole Shiv Sena minister in the central cabinet, to have been charged for fraud, cheating and committing breach of trust.

The financial scam of Rs 120 million had come to light last year in Goa. But a criminal complaint has been filed now, after gathering necessary evidence and handing it over to the Panaji police.

Gopalrao Mayekar, a former MP, along with eight other investors, has charged Shiv Sena’s reputed chartered accountant-turned politician for cheating around 80 investors from Goa, who invested their life-time savings into the Mumbai-based Western Indian Financial Services Ltd, the company he had floated.

The other directors are Nandan Gadgil, Brijbhushan Nagpal and Narendra Kumar, whose whereabouts are also not known till date.

They got attracted towards the “participative bill refinancing” scheme the WIFSL floated, assuring 20 per cent annual interest, maturity tenure of only 90 days and returns by post- dated cheques, which had a liability for criminal action under Negotiable Instruments Act.

It was also reputation of Prabhu, the then chairman of the Saraswat Bank, which made them believe in this attractive financial scheme. But the cheques got bounced in October ’96, after two regular payments were made earlier.

All the enquiries made in this regard proved futile as their Nariman Point headquarters in Mumbai was found locked while the Panaji office was also deserted. Today, not a single office is functioning.

Obviously, the shocked investors immediately moved to the court in March last year as the post-dated cheques had a liability under the Negotiable Instruments Act, but in vain. Except Prabhu, the chairman, none of the directors could be served court notices as they are not found till date.

On the contrary, they have found that all the directors have “resigned en mass in utmost secrecy”, while appointing Yogeshkumar Tiwari as the new MD and Shanti Bai as the new director. But their whereabouts are also not found.

“Tiwari is a dummy person appointed by the fleeing erstwhile directors to fool the law enforcing authorities and investors”, alleges Mayekar, an eminent educationist who had invested his whole retirement benefits in Prabhu’s firm in ’96.

Meanwhile, Prabhu sent a letter to all the investors that the WIFSL has been “taken over” by Adyashakti Group and renamed as the AMNET India Credit Corporation Ltd. But enquiries made to the Registrar of Companies have revealed that the WIFSL’s name has been changed to AMNET.

“It is a tactic to block the court proceedings in a desperate attempt to run away from the responsibilities and avoid criminal liabilities”, states Mayekar, who has personally gathered all the evidence, based on which the FIR has been now lodged against the union minister and others.

But the police refuse to act against Prabhu and others for violating section 138 of the Negotiable Instruments Act, claiming that it is a civil matter. The FIR has however been registered against them under sections 420 and 409 of the IPC, for cheating and committing breach of trust.

While the criminal suit filed in the court for dishonouring of cheques is still lingering, the police also do not seem to be in a mood to act fast on the fresh criminal complaint filed against Prabhu and others.

As none other directors have been responding to court notices, the investors are now planning to request the court to move ahead with the union minister as the sole respondent.

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