The Hindu : Tamil Nadu News : Efforts on to refund money to depositors of non-banking financial companies

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Friday, Jun 08, 2007
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Tamil Nadu

Tamil Nadu

Efforts on to refund money to depositors of non-banking financial companies

K.T. Sangameswaran

The goal of speedy justice could not be achieved by depositors in many cases: Federation

CHENNAI: Besides pursuing vigorously the trial of long-pending cases involving non-banking financial companies, the Economic Offences Wing (EOW) is making coordinated efforts with Official Liquidators and Administrators concerned to expedite refund amounts to depositors. The EOW is liaising with Collectors and the District Revenue Officers (Competent Authority) under the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act to speed up the process of attachment of the identified property, according to the Additional Director-General of Police, EOW, Archana Ramasundaram.

For instance, with regard to Anubhav Group of companies, 50 per cent of the amount had been repaid to over 12,000 depositors. Recently, the High Court permitted the auction of the properties of the company which will result in an increase in the repayment amount. The Administrator received belated claims also and obtained court orders condoning the delay. The remaining depositors would be repaid soon, Ms. Ramasundaram said.

As regards Royapettah Benefit Fund where Rs. 454 crore was due to be paid to 1.92 lakh depositors, Rs. 132 crore was repaid to depositors covering 25 per cent of their deposits in five instalments. Further, Rs. 11.50 crore had been recovered from borrowers and the High Court had ordered the evaluation of the company's properties on West Cott Road, Royapettah; Capital Towers, Kodambakkam High Road and Sterling Road. This was under process by the Official Liquidator.

In the Alwarpet Benefit Fund, payment of seventh instalment amounting to 35 per cent of the deposit was completed. Payment of the next instalment is likely to begin shortly.

The pending attachment proceedings in various cases were reviewed by the Home Secretary at a meeting with district officials in November last year and on May 30. Appropriate instructions were given to the officials.

Ms. Ramasundaram said the EOW's website was renamed www.tneow.gov.in. The e-mail address had been changed as tneow@tn.gov.in. Several depositors appreciated the steps taken by the EOW. Depositors and office-bearers of the depositors association can send in their suggestions and genuine grievances to the EOW. Also, in meetings with depositors this was being stressed.

S. Sitaraman, vice-president of the Federation of Investors Associations, said the goal of speedy justice "for full effective relief" could not be achieved by depositors in many cases even after 10 years from 1996. The federation desired to have a combined and result-oriented collective thinking and actions on the part of the legislature, judiciary, executive, representative bodies and members of the Bar to achieve the goal of speedy justice for depositors in all NBFCs, registered companies and nidhis.

Such meetings should be conducted periodically with proper, prompt and purposeful reviews of progress in cases, implementation of judgments, sale of property and distribution of sale proceeds to depositors and finalisation of cases thereby ensuring sincere involvement of all the concerned responsible persons.

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