What attracted farmers and mostly commoners is the 12% interest offered by the two Kottayam-based societies. However, a large number of people lost their deposits.

Hundreds lose life savings due to alleged mismanagement by Kerala rubber latex societiesImage for representation - Pixabay
news Human Interest Tuesday, February 25, 2020 - 18:28

Hundreds of people from various parts of Pala and Kottayam district who had invested their money, latex, and rubber sheets as deposits in the Meenachil Rubber Marketing and Processing Co-operative Society (MRMPCS) and the Pala Marketing Co-operative Society (PMCS), and were allegedly deceived by these societies, are yet to get back their dues.

Among the depositors who invested in the two societies, which became defunct in 2014-2015, include those who had earmarked the money for future needs such as children’s education and employees who planned for a peaceful post-retirement life.

MRMPCS was constituted to collect latex from farmers to process it and convert it to value-added products and then export the products. MRMPCS would also give money for the latex sold to them by the farmers.

An order from the Co-operative Societies Joint Registrar (general) demanded that the amount deposited by the depositors from 10 November, 2008 to 7 November, 2013 be collected from the MRMPCS governing council members. The governing council members include Joy Nadukara, KP Cicily Nadukkara, George Mathew, Joy Abraham, Stephen, Joy Joseph, Thomas J Perunnolil, KM Punnoose, KJ Tomy, PV Sukumaran Nair, Jose Tom Pulikunnel, George Joseph, CC Michael, Selly George, KA Chandran and Niceymol Cherian.

The order says that the MRMPCS governing council charged higher interest against the provisions of the circular issued by the Co-operative Societies Registrar, and gave a building on rent to the Lions Club. The report says that losses were incurred as a result of credit sales conducted by MRMPCS. It says that the above persons should remit Rs 5,82,06,880 with an interest rate of 8.25% for the loss incurred to the society.

PMCS, which was established to collect rubber sheets from farmers to be processed as crumb and sold to rubber mat manufacturing and tyre companies, also took latex from farmers.

A government order says that the PMCS governing council committed losses by diverting investments of Rs 4,98,92000 and Rs 4,63,36382 as advance to Sulabha Marketing Private Limited without the permission of the Co-operative Societies Registrar. This is in violation of section 57 of the Kerala Co-operative Societies Act, 1969.

The farmers used to give a substantial portion of their rubber sheets and latex to both societies. What attracted farmers and mostly commoners is the 12% interest offered by the two societies. However, a large number of people lost their deposits.

Heavy loss for small investors and Society employees

According to information accessed by TNM, more than 500 people and a number of co-operative banks had invested in MRMPCS while more than 120 individuals and many co-operative banks had deposits in PMCS. “According to estimates, Rs 17 deposits were collected from individuals and Rs 40 crore from primary co-operative banks at PMCS,” says Manual Thomas, convenor of the action council on PMCS.

Dominic Zacharias, a native of Marangattupally, had deposited Rs 5 lakh at MRMPCS in 2014-15 and another Rs 15 lakh at PMCS after employees of the two firms had come to his residence to canvass for deposits. He had invested in the two societies for the purpose of saving for the weddings of his two daughters. “They assured me that I can withdraw the deposited money at any time. But things began to go from bad to worse, none of my deposits or the interest from them was given to me. In fact, I had to take loans by pledging my properties and borrow money for my daughters’ weddings,” Dominic recalls.

The deposits were received by MRMPCS after getting a special order from the Co-operative Societies Registrar to receive deposits of up to Rs 1 crore citing absence of capital for obtaining provisions to invite deposits from individuals and primary co-operative societies. According to information available to TNM, among the Rs 67.5 crore that was deposited with MRMPCS, Rs 20 crore was from individual depositors and the rest from primary co-operative banks.

“However, instead of Rs 1 crore they collected Rs 67.5 crore from the public, and when the public asked them to return their deposit they said MRMPCS was in loss,” says Cheriachan Manayami, convenor of the action council of depositors who are fighting to get back their deposits. Cheriachan himself had deposited Rs 6 lakh at MRMPCS.

On his retirement, MM Gopi, a worker who served MRMPCS for 33 years, was compelled by the society to deposit his gratuity with them though it was against his wish, on the condition that he would be given the amount back after one year. “However, I am yet to receive a single penny from the Rs 6 lakh I deposited with the society. It was money squandering by the governing council which led to this financial crisis,” he tells TNM.

George Thomas Koonthanam, a native of Karoor, who had deposited latex worth Rs 10 lakh at MRMPCS hasn’t got a single penny in return. “I actually planned to get the money back in time for my children’s education. However, I haven’t received any money and now I have to arrange from somewhere else,” he says.

Many co-operative banks in Meenachil taluk are on the verge of collapse due to the alleged financial mismanagement in MRMPCS and PMCS.

Abhish K Bose is a journalist based in Kerala.

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