An Indian Union Muslim League MLA has been booked in Kerala on the charge of cheating depositors in connection with a gold investment scheme run by his jewellery group.
The controversy has mounted pressure on the Congress-led United Democratic Front, in which the League is a partner, at a time when it is trying to corner the Left government over a gold-smuggling case.
M.C. Kamaruddin, MLA from Manjeshwar, is accused of swindling hundreds of depositors from whom his company, Fashion Gold Jewellery, had allegedly collected crores of rupees.
Many of the depositors have complained to police that the company stopped paying even the profits from their investments since late last year. They have alleged that neither Kamaruddin nor the company’s managing director, T.K. Pookoya Thangal, responded to their calls.
The jewellery’s three branches — two in Kasaragod and one in neighbouring Kannur — have downed shutters since January, apparently because of financial problems.
Kamaruddin, charged under Section 420 with cheating, has alleged a “politically motivated case”.
“This is a civil matter and not a case to be handled by the police. It’s a politically motivated case and the police were forced to register it against me,” he told a TV channel.
Sources in Kasaragod said the individual depositors’ investments in the scheme ranged from a few thousand rupees to several lakhs.
Among the complainants, Abdul Shukur has said he invested Rs 20 lakh, Suhara has claimed investing Rs 1 lakh while E.K. Arif has claimed investing Rs 5 lakh. They have told the police the company used to regularly pay the profits every year until all the payments stopped late last year just ahead of the shutdown.
Some depositors have alleged the cheques issued to them last year had bounced because they carried forged signatures of the managing director.
Leader of the Opposition and Congress veteran Ramesh Chennithala on Saturday sidestepped reporters’ questions on the case against the ally. “I will comment later,” he said.
The controversy has pushed the Congress on the backfoot after nearly three months of bashing the CPM over the gold-smuggling case, in which a senior bureaucrat has been questioned multiple times by central agencies.
The secretary to the chief minister’s office, M. Sivasankar, was suspended after he was accused of links with some of the key accused.
The BJP has recently been sucked into the controversy with reports saying a friendly journalist had requested some of the accused to help the party with their diplomatic connections and advised them to defuse the scandal through the same connections.
The CPM has demanded Kamaruddin’s resignation as MLA to facilitate a fair investigation.
“He must resign or his party should remove him. Otherwise he can tamper with the investigation,” Kasaragod CPM district secretary M.V. Balakrishnan told The Telegraph.
“It’s unfortunate that Chennithala could not take a stand when it came to scamming these investors, most of them lower-middle-class people.”
Balakrishnan alleged the company had begun defaulting on payments to the investors in 2017.
“They paid small amounts of profit to some investors, while the cheques issued to the others bounced.”
No clear picture has emerged on how much the company owes the investors.
“The police investigation can throw more light on the number of investors and the money owed to them. We feel that Kamaruddin’s company owes Rs 110 crore to the hundreds of investors,” Balakrishnan said.
Sources said the company was formed in 2013 and the gold scheme was floated soon after.
