State decides to hand over Popular Finance scam to CBI

Thiruvananthapuram/Kochi: The state government has decided to hand over investigation into the Popular Finance scam to the CBI. Chief minister Pinarayi Vijayan said on Monday that the decision was taken after it was revealed that the fraud involves several deals and investments made outside the state and also outside the country.
After news of the scam broke out, several investors had approached the high court seeking a CBI inquiry. They insisted that this was the only way to protect their interests.
Earlier in the day, the government informed the court it is ready to hand over the case to the CBI and that the state has written to the Centre expressing its willingness for the same. It was responding to a petition filed by P Raveendran Pillai seeking an investigation by the central agency.
The Pathanamthitta-based Popular Group operated several branches in various states across the country and had been offering gold loans as an NBFC. It was found to be defrauding investors by siphoning off their money to shell companies abroad.
A statement filed by Pathanamthitta district police chief with the court, through the senior public prosecutor, said the group operated 238 branches and various shell companies and a complex investigation spread across various locations has to be conducted. Over 3,000 complaints have so far been received from investors, the statement said.
The money trail has to be tracked. Close relatives of the accused reside in Australia and the swindled money may be parked in foreign banks and foreign countries under benami names, it said.
The accused had promised investors an interest rate of 12% per year or doubling of yield in seven years. Deposits were converted to limited liability shares of nine shell companies. The money was then diverted to an NBFC, three Nidhi companies and then misappropriated, the statement said.
After investors approached authorities, firm managing director Thomas Daniel and his wife surrendered before police. Their daughters were arrested in Delhi while trying to flee to Dubai.