EOW records investors' versions, promises thorough investigation in Ghatkopar jeweller's Rs 300 crore crisis

Updated: Nov 02, 2019, 08:34 IST | Vinod Kumar Menon | Mumbai

As Ghatkopar jeweller sinks into crisis, depositors who invested lakhs in cash transactions are unable to show any documentation; just two complainants so far

MLA Parag Shah (R) and MP Manoj Kotak (C, in white) with investors outside the EOW office on Friday
MLA Parag Shah (R) and MP Manoj Kotak (C, in white) with investors outside the EOW office on Friday

Although cash and gold worth lakhs of rupees belonging to several investors are in jeopardy after the closure of Ghatkopar-based jeweller, Rasiklal Sankalchand Jewellers Private Limited, the police are baffled as they have no concrete complaints or supporting evidence. A day after mid-day's front-page story, 'Now a Rs 300 crore crisis in Ghatkopar', two complainants submitted written complaints to the Pantnagar police. However, neither of them gave any documents to support their claims of having invested Rs 20 lakh and Rs 40 lakh in the jeweller's scheme.

Sanjay Bhalerao, senior police inspector of Pantnagar police station, said, "We have only received two complaints so far, wherein the complainants have stated that they had invested over R20 lakh and R40 lakh and that they have been cheated. We are waiting for them to submit documents to corroborate the claims."

Zenil Shah, a director of Rasiklal Sankalchand Jewellers.  Pic/Rajesh Gupta
Zenil Shah, a director of Rasiklal Sankalchand Jewellers. Pic/Rajesh Gupta

"We are expecting 10 to 12 formal complaints and will contact the directors/proprietors of the outlet accordingly. A case will be registered after considering everyone's version and evidence," explained Bhalerao.

Advocate Vinod Sampat, who is also a resident of Ghatkopar (E), expressed similar concerns, "It will be interesting to know how many investors dare to come forward and disclose their investment in the gold scheme as they will also have to declare their sources of income. It is common knowledge that people invest unaccounted money in various gold schemes. This is reducing due to the impact of GST. These investors would not want to come under the government's radar by revealing their sources of income in a police complaint," said Sampat.

The jeweller's outlet in Ghatkopar East
The jeweller's outlet in Ghatkopar East

Meanwhile, Member of Parliament (MP) Manoj Kotak and MLA Parag Shah met Joint Commissioner of Police (EOW) Rajvardhan Sinha along with a few investors on Friday morning. Sinha assured full cooperation and appointed an officer to assist the complainants.

Speaking to mid-day, Kotak said, "The EOW has recorded complainants' statements and an officer of the rank of senior police inspector, M Lad, has been appointed to monitor the case."

Rasiklal Sankalchand Jewellers owes over R115 crore in bank loans. Pic/Rajesh Gupta
Rasiklal Sankalchand Jewellers owes over R115 crore in bank loans. Pic/Rajesh Gupta

Whereas Sinha said, "We are in the process of recording the complainants' statements. No FIR has been registered so far. We will have to conduct preliminary inquiries. A team will visit the outlet and verify all the claims."

In crisis since few months

According to jewellers in Ghatkopar, Rasiklal Sankalchand Jewelers was formed in 1972 and was very popular in the bullion market. It was converted into a private limited company 2000, with its directors being Vatsal Jayesh Shah, Jayesh Rasiklal Shah, Zenil Jayesh Shah and Nilesh Rasiklal Shah.

In the last couple of years, the company started operating out of a 15,000 sqft ground plus four-storey structure on M G Road. A jeweller, on condition of anonymity, said, "During demonetisation, the Rasiklal outlet used to remain open till the early hours. However, in the past few days, they had been defaulting on payments to gold suppliers, which adversely impacted their business."

What triggered the case

The jeweller added, "They had taken a bank loan and had given their assets as collateral. It was becoming difficult for them to repay it. Worst was that some schemes involved depositing a certain amount of gold and getting one gram extra. This made it difficult for them to raise funds. We have also learnt that they were delaying the salaries of the staff."

According to locals, the outlet was found shut two days ago, which immediately caused panic. Rumours started circulating on social media but Rasiklal Sankalchand pointed out that their shop is usually shut for two days after Dhanteras.

One of the directors, Zenil Jayesh Shah, registered a non-cognisable complaint on October 29, under Section 500 (criminal defamation) of the Indian Penal Code at Pantnagar police station against unknown people for circulating fake message defaming the outlet. Attempts made to contact Zenil and the other directors did not yield results. Help for a select few?

"When I met the proprietors along with the investors on Tuesday, they were making excuses that they would sell their assets and pay everyone. But we insisted that certain percentage of the invested amounts be paid immediately and he agreed to pay 10 to 15 per cent of the deposited value in the form of gold ornaments. Gold worth R1.5 crore was given to investors till early morning," said MLA Parag.

Some residents claim that those with power got some of their invested money in the form of gold but many others are in limbo. Parag refuted these claims and said that he helped all who were present at the shop on Tuesday. "Also, as promised, Manoj and I accompanied the investors to the EOW," Parag said.

According to Parag, the proprietors themselves told him about R115 crore that they owe in bank loans. "They also said that they have property worth R200 crore, including a huge flat in Kukreja tower, the 15,000 sqft shop at M G Road and another flat in Neelkanth Valley. But looking at how the market currently is, it won't be easy to sell them. Hence, we decided to approach the EOW," Parag added.

Prakash Mehta, a senior BJP leader and other local residents, were upset with the 'highhandedness' shown by Parag. Mehta said, "It was an attempt to pressure the jeweller and get gold for a few select investors."

"MP Kotak and MLA Parag are not responsible to recover people's money. That is the police's job. They may have gone with good intentions. But according to what I am hearing, the MLA got an inventory of goods prepared and assisted some people in recovering the money. If this is true, it could amount to interference in the administration of justice. This is because if a stock is hypothecated with a bank, how can a third party interest be created by the MLA?" said Sampat.

"Double standards are observed at such times where one rule is applicable for the rich and mighty and the common man suffers the most. This was also very evident in the PMC case, where influential people were given backdoor entries into the bank to take their belongings. One fails to understand what checks the regulators have for such events. The government must insist on compulsory disclosures and mandatory publication of loan details just as salaries of top management are to be disclosed under the Companies Act," Sampat concluded.

Rs 1.5 crore
Value of gold that was distributed by the jeweller to the investors

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