Prudential Caps cheques bounce

MUMBAI, NOV 11: Even as depositors began lining up for withdrawal of money, Prudential Capital Markets has downed shutters of one of its tw...

MUMBAI, NOV 11: Even as depositors began lining up for withdrawal of money, Prudential Capital Markets has downed shutters of one of its two offices in Mumbai. The office at Embassy Centre in Nariman Point has been closed much to the chagrin of investors.

The second office of the company in the city is also on the verge of the closure. Most of the employees have left the company and cheques issued by the Calcutta-based NBFC have started bouncing. Left with no alternative, depositors are planning to approach the police on Thursday.

When contacted, Prudential officials in Mumbai said that even their salary cheques have stopped coming from the Calcutta headquarters.

Coming close on the heels of CRB scam, many depositors have applied for redemption of their deposits which the company is now unable to pay back. As the Reserve Bank of India has banned the company from raising deposits from the public in view of the grim situation of the NBFC, and the State Bank withdrawn the at par8217; facility, all sources of funds for the company have dried up.8220;Hence, the present crisis,8221; says Vinod Baidya, Chairman of the company in a communication to the depositors.

In fact, in order to safeguard the depositors8217; interest, the RBI has also appointed a monitoring officer to take stock of the situation. Some of the depositors are now organising themselves to devise suitable action against the company. quot;We are planning to meet in front of Prudential8217;s offices in Mumbai on Thursday noon, and then decide on the future course of action,quot; said Kirit Shah, one of the depositors who has invested more than Rs 40,000 in the company.

He said, replying to legal notice, Prudential Capital has said that it would be sending all the repayment cheques from Calcutta so as quot;to reduce overheads for expediting payment to depositors.quot;

quot;However, even after sending various letters and reminders, cheques which have finally come from Calcutta bounced,quot; he said. When depositors approached the company during the earlier phase of the current financial year, for the redemption of their deposits, the company asked them to go for a renewal for one year duration.8220;Financial crisis was the only reason as to why we had to make this humble request to our deposit holders,8221; said a source.