Money lenders take pride in their trade — “Madurai decides whom to finance in Kollywood….”
In the thickly-populated K. Pudur - Moondrumaavadi area, Pankajam and her husband Ramanathan toil hard, selling idlis for a living. A dream to expand their small business took them to a local money lender in nearby Athikulam.
This man would not only charge less interest, but also return swift cash against gold jewels. So, Pankajam pledged her gold chain weighing seven sovereigns and borrowed Rs. 40,000.
When the couple’s business grew, they approached financier Lakshmanan after eight months to redeem the chain. But the pawn-broker offered lame excuses and fled when more people, who had pledged their jewels, started queuing up in front of his office-cum-residence. Angered public staged road blockade and took the matter to Oomachikulam police.
Once police investigations began, there was a flood of petitions. The police received 1,055 complaints totalling 11,648 sovereigns of gold jewels pledged with the financier.
Preliminary investigations reveal that Lakshmanan allegedly mismanaged his funds which propelled him into a situation where he was forced to borrow money at exorbitant rates. Tipped off on the role of usurers behind the pawn broker, special teams were set up which tracked down and arrested three moneylenders. Cases under Tamil Nadu Exorbitant Interest Act were booked against Raja alias ‘Valaipazham’ Raja, Chandran and Souri Ambalam.
Further probe revealed that one of them gave Rs. 7 lakh to Lakshmanan, who repaid Rs. 6.50 lakh over the last six months but still had to return the principal amount. According to Superintendent of Police V. Balakrishnan, only blank cheques were handed over and signatures obtained on promissory notes. The interest worked up to 60 to 72 per cent. In another case, Lakshmanan took Rs. 3 lakh and paid Rs. 18,000 as interest for 10 days.
Lakshmanan’s modus operandi was to charge meagre interest (less than even some public sector banks) from borrowers. Then he would re-pledge the gold jewels with private firms. An investigating officer explained a particular case wherein the original borrower took a loan of Rs. 50,000 against 50 grams of gold and Lakshmanan, in turn, allegedly obtained Rs. 1 lakh, re-pledging it with the Kerala-based finance company, thus exposing the liability double-fold.
The Madurai district police registered 25 cases in 2012 and six this January.
According to the police, the dossier of some of the money lenders shows that they were involved in many criminal offences ranging from petty crimes to grave ones prior to taking on the new avatar of “money lending sharks.”
In the Oomachikulam police station case, the accused moneylender, Raja alias ‘Vazhaiipalam’ Raja allegedly figured in a couple of theft cases before entering the money lending business. Others, also accused of charging abnormal interest for loans last year, figure in police records for various offences under IPC Sections related to cheating, threatening, and criminal trespass.
These money lenders mostly advanced loans to roadside vendors, petty shopkeepers and hoteliers. The modus operandi varies. Borrowers are categorised as small, medium and big.
While roadside vendors’ borrowings range from Rs. 10,000 to Rs. 1 lakh, those in the middle segment go up to Rs. 5 lakh and the big league borrowers cross Rs. 10 lakh.
For a loan of Rs. 10,000, the money lenders gave Rs. 9,000 to the borrower, who would repay Rs. 100 daily over a period of 100 days. The thousand rupee taken initially goes as interest.
Any delay in repayment would mean extension of the number of days, according to the police.
The big players in the hotel industry are able to repay from their daily sales on time. They invest the borrowed funds in real estate and into their own businesses. “By paying cash to our grocery suppliers, we gain huge discounts. For us, cash availability means more than the exorbitant rates,” said a hotelier.
Some of the money lenders who charge exorbitant rates take pride in their trade. A senior police officer recalls a decade-old financier’s quote: “Madurai decides on whom to finance in Kollywood industry….”
And, of course, those who lived long in Madurai are well-versed with the grapevine that popular film producer G. Venkateswaran (GV) allegedly committed suicide after he was tortured by the money lending sharks.