Probe into RBI, DCA role in RBF demanded

acirc;euro;tilde;acirc;euro;tilde;The depositors, to whom the company owes over Rs 500 crore, have doubts about the correctness of certificates given by RBI, Company Law Board and Company Affairs Department,acirc;euro;trade;acirc;euro;trade; he said, adding only a CBI probe would unravel the truth. The Associationacirc;euro;trade;s efforts had resulted in RBF repaying 10 per cent of the deposits, but this amounted to Rs 52 crore. They were aggrieved that the government had not taken tangible steps to force five acirc;euro;tilde;mega-borrowersacirc;euro;trade; who owe nearly Rs 400 crore together to repay their dues quickly, or bring to book those responsible for improper sanction of loans. acirc;euro;oelig;Regulators are not taking tough measures against defaulters even after the collapse of CRB, DSJ, Prudential, Helios and hundreds of other finance companies,acirc;euro;trade;acirc;euro;trade; said an investor.

The Associationacirc;euro;trade;s general body will meet here on Nov 27 to consider a proposal from the new Chairman to revive its operations. Its office-bearers had made it clear that they could agree to the revival only after a minimum of 30 per cent of the deposit money was repaid to depositors.

Meanwhile, depositors of RBF Nidhi can hope to get some good news. P Sabanayagam, the new special officer of the company, is hopeful of paying the third installment to all the depositors of the company by the end of this financial year. As per the scheme approved by the Company Law Board, the depositors will be paid five per cent of their deposits, subject to a minimum of Rs 1000.Speaking to The Indian Express, he said the board has taken various measures to ensure speedy recovery of dues from the borrowers of the company so as to pay the depositors. acirc;euro;oelig;We have sold some of the properties of the company in Chennai and Bangalore for about Rs 7-8 crore and the sale proceeds of the properties would be received in parts over a period of time,acirc;euro; he said.

The board has also started auctioning some of the jewels against which loans have been taken by the borrowers. Over the past two days the board has realised about Rs 5.6 lakh from the jewellery auction.The other borrowers have also been asked to pay off their dues to the company as early as possible.

Incentives are been given to the borrowers who pay their dues within a stipulated time-frame, Sabanayagam added. The overall dues to the company from the borrowers is about Rs 491 crore including Rs 231 crore from Balaji group, Rs 36 crore from Alsa group, Rs 87 crore from J M Pandey, Rs 40 crore from Pradeep Kothari. So far, Balaji group has paid about Rs 50 cr to the board.

Sabanayagam said the board will require about Rs 25 crore to pay the third installment, and once the amount is recovered, depositors will be paid. So far the board has paid two installments aggregating around Rs 55 crore to all the depositors as against the total outstanding of Rs 464.50 crore. The default by RBF had shaken investor confidence badly in the last six months.

MCC Finance scam still rages

CHENNAI:MCC Finance which collapsed with crores of rupees of small investors is yet to refund the money. It may be recalled that chairman of MCC Finance AL Vadivelu and his son, managing director of the company Jawahar Vadivelu had agreed to bring in Rs 3 crore for settling dues of Rs 5000 category depositors before June 2000. Of this, they paid only Rs 2.75 crore. Added to this was the regular recoveries from hire purchase transactions, which helped settlement of 30,000 depositors to the tune of Rs 10 crore for depositor categories covering Rs 5000 and Rs 10,000. The promoters were also to bring in Rs 36 crore over a period of 12 months towards settlement of dues to the depositors. However, it is learnt that AL Vadivelu and his son Jawahar Vadivelu have not brought in funds as promised. The Madras High Court in a recent order had said the company had defrauded the depositors for a sum of over Rs 200 crore by diverting the funds to MA Chidambaram group of companies. It may be recalled that the High Courthad severe strictures on the chairman of MCC finance and his son who happens to be the son-in-law of AC Muthaiah.