Kerala HC directs CBI to take over probe in Popular Finance case

The High Court issued an order based on a petition by depositors who sought a CBI probe into the case.
Kerala High Court
Kerala High Court
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Kerala HC directs CBI to take over probe in Popular Finance caseThe Kerala High Court on Monday handed the Popular Finance scam case to the Central Bureau of Investigation (CBI). The CBI will now investigate as many as 1,368 cases that have been registered against the top brass of Popular Finance, after several depositors complained that they had been cheated of their money.

Hearing a petition by depositors who demanded a CBI probe, Justice P Somarajan issued the order directing the CBI to take over. The scam has been evaluated at Rs 1,600 crore and Popular had 258 branches within and outside India where depositors have claimed that their money was siphoned off to the UAE and Australia.

The court has directed the CBI to form a special investigation team to probe the case, with the officers having sufficient expertise in investigating economic offences. The court also directed the CBI to pick officers with ‘unblemished integrity and competence,’ according to reports.

Apart from this, the High Court asked the state government to frame rules in order to implement the Banning of Unregulated Deposits Scheme Act (BUDS Act) and appoint a dedicated court in accordance with the BUDS Act within two weeks. The Act is to “provide for a comprehensive mechanism to ban the unregulated deposit schemes, other than deposits taken in the ordinary course of business.” It also works “to protect the interest of depositors”.

The court also asked that the deposits held by the deposit-takers be attached in their name or any other person on their behalf as per the provisions of Section 7(3) of the BUDS ACT. This includes attaching all properties which are under the Kerala Protection of Interest of Depositors in Financial Establishment and other assets of firms run by the Popular group.

Until the appointment of a designated BUDS court by the state, all orders/proceedings taken by the CBI court will be deemed to have been taken by a designated court under the BUDS Act. Between August and September, the police arrested five of the accused in the Popular Finance scam case including MD Roy Daniel, his wife Prabha and their daughters Rinu and Riya. Investigation had revealed that the family planned to relocate to Australia and had siphoned off large sums of the depositors’ money to foreign countries. 

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