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Goa set to get tough with crooks

Sandesh Prabhudesai in Panaji

After tourists, Goa is presently a major attraction for yet another class of people. They are in lay parlance called cheats; they are the "financial criminals".

In the last five years, at least 20 such non-banking financial companies appear to have duped thousands of Goans for over Rs 500 million. But, strangely, the police have not detected a single case till date.

The only sigh of relief now is an ordinance the state Congress government is planning to promulgate, to protect the interest of depositors. While the state cabinet has already agreed upon the ordinance, it still requires the central government's assent. After that, the state government plans to present the bill in the assembly during the monsoon session.

A replica of the Tamil Nadu Act, the Goa Protection of Interests of Depositors (in Financial Establishments) Bill provides for stiff penal provisions including fines up to Rs 100,000 and imprisonment up to 10 years to every person in a position of responsibility at the financial establishment concerned.

Under the act, a special court would be set up to deal with all such cases, which would have a judge equivalent to the rank of district and sessions judge. It also provides for attachment of property of the persons of responsibilty at the NBFCs in the absence of payment to investors.

Though Chief Minister Pratapsing Rane appears to have taken a tough stand, his attitude of turning a blind eye to the demand made by the police department to set up a special cell to deal with such cases might just negate the whole exercise.

According to Police Inspector-General P R S Brar, only police personnel trained in and knowledgeable about financial matters can investigate such cases. Inexperienced officers will only mess up the whole case, giving the NBFCs many opportunities to get off scot free.

In fact, the Congress government's role while dealing with a case against Union Environment Minister Suresh Prabhu of the Shiv Sena, is a clear indication that the authorities are not serious about such scams. Around 200 investors have been duped for Rs 12 million in this case.

The complainants have provided enough prima facie evidence to the police to nab the culprits, belonging to the Western India Financial Services Ltd, where Prabhu was chairman. The police have, however, only issued non-bailable warrants against all except Prabhu.

Goa seems to be a favourite destination for NBFCs who target the Gulf-based NRIs in Goa, who invest hundreds of thousands of rupees into such NBFCs, lured by the attractive rates of interest. Even the nationalised and private banks record relatively high amount of deposits in Goa.

The modus operandi is simple: open posh offices, appoint Goans as managers and commission agents, and win the confidence of the customers for at least six months or a year, before disappearing from the scene.

Heading the list is the Rockland Leasing & Plantations Company with an amount of Rs 170 million invested by thousands of Goans. Second in line is JVJ Finance, which had set up several offices in Goa since May 1996 and attracted deposits of Rs 60 million.

Others include the Calcutta-based Janapriya with an amount of Rs 18 million; the Tamil Nadu-based Sarvana Credit and Investments Ltd with Rs 15.7 million; besides Middleman Goa, Woodstick & Woodstick, Welfare Savings and Credit Ltd, Prudential Capital Market, Deeplaxmi Green Plantations, etc.

Complaints filed before the local Reserve Bank of India office as well as at several police stations indicate a comprehensive figure of only around Rs 290 million. But police sources admit that the figure should be at least double that and many more cases are expected to come to light.