The Telegraph
Monday , May 6 , 2013
Since 1st March, 1999
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Delhi HC lifeline for sunk crores

Investors duped by the Saradha Group can hope for justice despite delays. For, over one lakh Jharkhand residents who invested Rs 250 crore in the Chandigarh-based non-banking finance company Golden Forests India Limited, which went bust in 1998, may soon get back their principal plus 40 per cent interest.

Delhi High Court passed an order on May 1, asking retired Chief Justice R.N. Agarwal, the official liquidator appointed in 2009, to submit a report on the dud company’s property sales and disbursement process by May 27.

In simple terms, it means that Agarwal, overseeing the sale of physical assets owned by the fraud financial firm — for instance, land in Punjab and Haryana — will now table before the apex court how much money has been generated to pay off investors. So far, Agarwal has been able to realise around Rs 750 crore through property sale.

Sudip Mukherjee, general secretary of National Investors’ Forum, a party to the case, confirmed the development. Hopes of payback were also shared among 200-plus Jamshedpur investors who gathered at Jubilee Park on Sunday.

Of the one lakh investors in Jharkhand, around 33,000 — one-third — are from Jamshedpur. The rest are from Ranchi, Dhanbad, Bokaro and Chas. As far as investments go, of the Rs 250 crore invested by Jharkhandis, Rs 100 crore came from cash-rich Jamshedpur.

“Delhi High Court has offered investors a lifeline by asking the liquidator to submit a status report by May 27. Investors are now optimistic of getting back their hard-earned money,” Mukherjee told The Telegraph. According to the court directive, investors would get back the principal sum invested with a cumulative 40 per cent interest — Rs 1.40 lakh for every Rs 1 lakh, for instance, Mukherjee added.

The National Investors’ Forum will also advertise in newspapers, requesting investors to register claims for the money.

“It’s a great achievement for us. All these long years, we have maintained peace and unity and waited for our money with hope. I had deposited Rs 10 lakh which I got from Tata Steel’s early separation scheme or ESS,” said Golden Forests investor S.C. Jha, a resident of Kadma.

“I had also invested a portion of the Tata Steel ESS money in 1998. I had lost all hopes of getting it back,” said K.D. Thakur, an Adityapur resident said.

Golden Forests had, in its heady days in the 1990s, floated two schemes — fixed deposit and monthly income.

The company issued post-dated cheques to investors opting for the monthly income scheme, while fixed deposit holders were assured a piece of land starting from one marla (a term for an acre prevalent in Haryana and Punjab) as a guarantee-cum-performance deed in exchange of the amount deposited.

Right now, the company’s total assets stand at Rs 1,500 crore while its liabilities are estimated at Rs 950 crore.

Can non-banking financial companies be monitored well?