The owners of Popular Finance, a finance company in Kerala providing gold loan and other associated services, have absconded after scores of customers raised complaints of swindling by the firm. Pathanamthitta police have issued a lookout notice against Popular Finance’s director board members, including managing partner Thomas Daniel Roy and Prabha.
Customers said that the company has failed to pay interest to hundreds of its depositors since this April. Headquartered in Pathanamthitta district, the firm has 247 branches across the state. It is reported that all branches of Popular Finance have been shut after customers started created commotion following recent reports that the company allegedly went into a loss.
Depositors have invested an amount from Rs 10,000 to lakhs with Popular Finance. According to reports, the financial company owes money to about 1,500 depositors, including non-resident Indians (NRIs).
PS Rajesh, Inspector of Konni police station, who heads the investigation, told TNM that a case has been registered against all members of the board of directors, including owner Thomas Daniel. They have been booked under sections 406 (punishment for criminal breach of trust), 420 (cheating and dishonestly inducing delivery of property) and 34 (acts done by several persons in furtherance of common intention) of the Indian Penal Code.
On Thursday, Pathanamthitta district police chief KG Simon said that complaints started pouring in from depositors. "From our estimates, the total loss to depositors is to the tune of Rs 2,000 crore. We have enough proof to arrest the owners," said Simon.
Speaking to TNM, customers of the firm said that it was the first time such an issue was being reported by Popular Finance.
“I had deposited Rs 35 lakh and had been receiving 12% monthly interest. But since April, we have not been receiving our interest. At first, they attributed the delay to some technical issues. It was later that we learnt that the company has gone into a loss. The managers of some branches are now revealing that the company has invested the fixed deposits of some customers in other firms,” said 42-year-old Retnakar, a native of Karunagappally.
Anuraj, another customer based in Karunagappally, told TNM that he had deposited money in the firm due to its legacy of trustworthiness. “But this has now proved wrong. The officers in the branch kept saying there was nothing to worry, and now they have shut the branches and gone. Who is supposed to take responsibility for our hard-earned money,” asked Anuraj.
Konni legislator KU Janeesh Kumar told TNM, "Various bank accounts of the owners have been frozen and information has been given to ensure that they are not allowed to travel abroad. This was considered a credible financial institution until the complaints started coming in.”
Pathanamthitta Lok Sabha member Anto Antony said he has been besieged by anxious investors who have been calling him since the news surfaced.
Meanwhile, a press release issued by managing partner Thomas Daniel stated that the company has been facing a financial crisis due to the COVID-19 pandemic. He also added that he will solve all the issues and settle all amount the firm owes the customers if he is provided six to nine months.
The release, which has been signed Thomas, also said that he and family are “not absconding but have temporarily kept away due to the pressure from media and police.”
(With inputs from IANS)