NBFCs still free, investors helpless

Sandesh Prabhudesai
29 June 2000  

Over five years have passed now but not a single investor has been able to recover their life-time savings from any of the fraudulent non-banking financial companies till date. Thousands of Goan investors, on the contrary, are running from pillar to post to recover their money with no visible solution in sight.

There are at least 56 such cases registered at different police stations in the tourist state, mainly along the coastal belt wherein most of the Gulf-based NRI residents transferred their hard-earned savings to the NBFCs offering attractive rates of interest.

In fact it becomes extremely difficult to assess the total amount involved in the scandalous act by several NBFCs which mushroomed in the state as complaints are filed before different authorities like the police as well as the local RBI office while many have preferred to directly approach the courts of law.

The information supplied by chief minister Francisco Sardinha in the ongoing monsoon Assembly session states that 25 NBFCs found to have been defaulted while five more are still functioning in the state without any complaint. At least 19 among them involve total amount of around Rs 12.21 crore.

But the RBI sources reveal some more cases like Rockland Leasing & Plantations Ltd, involving a round figure of not less than Rs 17 crore while a company like JVJ Finance for minimum Rs six crore and Calcutta-based Janpriya for around Rs 1.80 crore.

The special economic cell constituted in the police department for the purpose has registered 56 such cheating cases involving 21 companies for the amount of around Rs 21 crore. After investigating into it and confiscating their property in some of their closed offices, the police have chargesheeted at least 44 cases.

"The police officers are hand in glove with the NBFCs and the accused are moving freely in Goa without any fear", alleges Dr Wilfred de Souza, the former chief minister. Sardinha has now assured him to appoint a special police officer of the rank of the ASP or the DySP for the purpose.

But whether this would solve the problem, wonders BJP leader Manohar Parrikar, as the same economic offences cell has left at least three such NBFC directors scot free on flimsy grounds without taking any action.

The famous case among these involves union minister for chemicals and fertilisers Suresh Prabhu, former chairman of Western India Financial Services Ltd, whose name has been dropped by the district court on technical grounds while all his other partners are still absconding. It has now been challenged in the high court.

Though Prabhu, the banker-turned-politician belonging to Shiv Sena, has been still avoiding appearance in the high court, he had to stand as an accused in the Margao court in February in yet another cheating case filed against him. The WIFSL believed to have cheated at least 200 investors for around Rs 1.20 crore.

The Goa Protection of Interests of Depositors (in Financial Establishments) Act, passed last year, is yet to come into force. "After framing the rules and appointing deputy collectors as district recovery officers, we are now awaiting a nod from the high court for constitution of special courts", informs Sardinha.

The act, passed by Goa on the lines of Tamil Nadu, provides for stiff penal provisions like a fine up to Rs one lakh and imprisonment till ten years to every responsible person of the financial establishment, besides providing for attachment of property.

Your Comments Please