HC issues non bailable arrest warrants against three bank managers in connection with a gold loan scam

A pawnbroker had reportedly collected 309 kg of gold jewels from 2,280 people on the pretext of offering interest free loans and repledged them with banks, NBFCs and other pawnbrokers

March 13, 2023 09:54 pm | Updated 09:54 pm IST - CHENNAI

Worth of gold jewellery is about ₹34.87 crore. Photo used for representational purpose. File

Worth of gold jewellery is about ₹34.87 crore. Photo used for representational purpose. File

The Madras High Court on Monday ordered issuance of non bailable arrest warrants against three branch managers of Catholic Syrian Bank (CSB) in connection with a case related to a pawnbroker at West Mambalam in Chennai having allegedly collected 309 kg of gold jewels worth over ₹34.87 crore from 2,280 people on the pretext of offering interest free gold loans and repledged them with banks, non banking finance corporations and other pawnbrokers.

Justice Krishnan Ramasamy ordered issuance of NBWs, returnable by March 27, against the managers of Parrys, Kodambakkam and Royapettah branches of CSB since they were not present either in person or had engaged any counsel to represent them before the court. The judge also ordered issuance of a similar warrant against the Managing Director of Gokulam Chit and Finance Company Private Limited at Kodambakkam in Chennai.

Further, he summoned the Superintendent of Police, Economics Offences Wing (EOW), to the court on March 27 to explain whether the investigating agency had succeeded in locating the entire quantity of 309 kg of gold jewellery since the report filed on Monday contained details only about a part of the total quantity. The judge asked Reserve Bank of India (RBI) counsel Chevanan Mohan to assist the court in adjudicating the matter.

In its latest report, the EOW told the court that the prime accused Syed Hifzur Rahman Biyabani, holding a pawnbroker’s licence, had started a firm titled Ruby Royale Jewellers and Bankers at West Mambalam a few years ago and promised interest free gold loan to Muslims. However, the condition was that he would offer only half the value of the gold jewellery as loan. As many as 2,280 people fell prey to his design and pledged their jewels.

He was assisted by Aneezur Rahman, Aruna Rani alias Rihana, Valarmathi alias Shajitha, A.S. Sivagami alias Shakina and Ravi in collecting the jewellery. When the police registered a criminal case against them in 2019 for not returning the jewels to their owners, the prime accused Biyabani filed an insolvency petition in the High Court and obtained favourable orders. Subsequently, the six accused were arrested in Telangana in January 2021 and were released on bail in April 2021.

Further investigation revealed the accused had re-pledged the jewels with various banks, non banking financial corporations that offer gold loans and other pawn brokers. The EOW sleuths had also recovered sale documents with respect to 40 immovable properties owned by the prime accused and five properties that he had taken on rent after paying substantial amount towards security deposit. The value of those properties were being assessed, the agency told the court.

Listing out the places where the jewels had been re-pledged, the EOW said they included three branches of Muthoot Finance, Kumbakonam Mutual Benefit Fund at Mylapore in Chennai, South Indian Bank, Fed Bank Finance and Services Limited, Muthoot Mini Finance and Indian Infoline Finance. The accused had also repledged many jewels with pawn brokers C.P. Jain and his wife Asha Jain of Nandanam who, in turn, had pledged them further with CSB branches.

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