Nirmal fraud: Crime Branch unearths benami properties

Shopping malls, residential plots in upscale localities, sprawling bungalows among them

The Crime Branch has found that promoters of the Nirmala Krishna Nidhi Fund had purchased land in the name of their nominees before the firm went bust, depriving hundreds of ordinary depositors of their life’s savings in September last.

Crime Branch investigators perused bank statements, Registration Department documents, and revenue records to identify several prime properties purchased by the chit fund operators in Thiruvananthapuram, Kollam, and Kundara.

They included shopping malls, residential plots in upscale localities, and sprawling bungalows.

The agency said that one of the promoters, the prime accused in the case, had resigned from the company’s board a fortnight before he filed for bankruptcy in a civil court here. As if according to a plan, an entrepreneur in Dubai attached some of the firm’s pricy assets on the ground that the promoters owed him money.

The Crime Branch has passed on the information to the Economic Offences Wing of the Tamil Nadu Police, which is probing the case. It suspected a conspiracy in the takeover of the chit-funds assets by the Dubai-based businessman. The agency has also found that the promoters had acquired a flourishing chain of shops that retail opticals across Kerala and Tamil Nadu.

Recompensing depositors

The agency said its efforts could help recompense an estimated 5,000 depositors who lost their investments to the company. The Tamil Nadu government is likely to apply the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act to compensate the investors.

The Crime Branch investigators said the finance company had offered usurious interest for deposits, often up to 15% a month. It meant that depositors could get an interest of ₹1,500 a month for an investment of ₹1 lakh.

The firm, in turn, invested the money in real estate. Demonetisation struck, and the business found it difficult to find buyers for their properties. The cash flow stopped, and the company found it increasingly difficult to pay depositors. The Crime Branch said the chit fund soon became a Ponzi scheme wherein the promoters used the money of new depositors to pay off old ones. It pegged the fraud at ₹500 crore.

Inspector General of Police G S. Sreejith and Superintendent of Police K. Prasanthan Kani are heading the probe.