"Don't beat me uncle, I won't be better..!"
Though we have an array of current public issues which
requires imminent attention, the recurring financial frauds in the state is the
one to be addressed immediately, which had already given much jolts to the
economic health of the state. The series of financial scams need to be examined
on the grounds of the current financial, investment, economical and the
sociological climate of the state.
Kerala’s history does not have much to elaborate on the
financial frauds of the past. There would have been financial deceits right from
the very early beginnings, but they were limited within a small circle of two
or three persons. The first of the large scale scams in terms of both money and
people involved after the state of Kerala was formed, was the infamous “blade
companies” which offered skyrocketed interest rates for deposits accepted from
the public. The eighties saw mushrooming of such companies at every nook and
corner of the state and people were cheerfully queuing up at their door steps
for making deposits. Advertisements luring public for deposits were common in
newspapers during those times. None enquired about the veracity of offers of
those tall interest rates and no authority intervened in time. Apparently,
things were going on very smoothly for some time but alarm bells started
ringing when few of the customers were denied when they demanded their deposits
back. News spread in no time on the crumbled financial situation and the same gleeful
crowd once queued in front of them, thronged the companies to get their
hard-earned money back. Many could see only the downed shutters while their
promoters have already fled away with the fortune. It took some time for the
hullabaloo to settle down and like all events this too was faded away with the
time. Many of the company owners were declared bankrupt and the ultimate losers
were the depositors who lost lakhs of their hard earned money.
The next generation financial scams made a return in the nineties.
Unlike in the past these attempts were much more organised and wrapped in novel
ideas and schemes. Long-term financial depository schemes in projects like
Manjium, Teak, Goat etc. which were never heard before and the way of
presentation through advertisements left nothing to suspect. Even the most wary
of the lot were made to believe the authenticity of the projects by personally
visiting the goat farms and teak plantations. But even the cleverest never knew
the bleating of the goats and whispering teak / manjium leaves actually belong
to somebody else! Just like the earlier episodes, once the deposits reached the
expected levels, all the promoters took to their heels with the collected
funds, leaving the depositors in lurch. Though criminal proceedings were
initiated, not much could be recovered leaving another saga was written in tears
in the history of state’s financial fraudulence.
It would be a matter of coincidence that financial scams
repeat or return in the state every decade. The new millennium saw the greatest
of the financial frauds of all times. It seems the millennia rackets would have
done much homework and research before introducing bogus schemes before the
public, in turn who would never learn from the past experiences. The “Total 4
U” scam was the biggest fraud of all times which was unleashed in the state. Changed
with the latest tunes, the deposit schemes were made attractive by way of false
propaganda of linking the investments with share markets, future trading of gold,
dollar, petro etc. and with anything and everything which the clueless,
illiterate depositors would never suspect. It was a matter of just few months
when the Total 4 U crumbled owing much to the extravagant life style of its
promoters. More shocking was the involvement of the kith and kin of the ruling
political party leaders and the ministers, which made the police enquiry an
eye-wash. The investigation is still going on while the acquitted are roaming
scot-free. The public at large now has almost forgotten the Total 4 U episode.
As a matter of fact mentioned earlier, this decade also
witnessed a financial fraud. Dancing with the latest tunes and exploiting the
apprehensions arisen from the power crisis of the state, safe solar energy was
introduced under the banner of “Time Solar”. Frauds were done primarily at two levels
- cheating those who paid advance money for installing solar panels in their
premises and accepting crores of money as investments in the company, offering
them company stakes. All the money flown in was either immediately transferred
to safe havens or spent lavishly in real estate, building mansions, dine and
wine. Many of the fraudulent transactions appeared to have happened with the
consent of political leaders and even ministers. Even the Chief Minister
himself was dragged into the controversy. Three of his staff members were
suspended and one arrested. Unlike the past times, lust and flesh were traded for
the first time to entice the probable investors and to influence ministers.
The latest trends of financial frauds are very much
disturbing when the much adored, homely, peace loving and thrifty Malayalee
nature is concerned. Though there were myriad individual instances of cheating
and fraudulent transactions in the past, never their access with those who are at
the helm of governance came to light. The proximity enjoyed by the fraudsters
with the ministers and top officials might have endorsed the credibility of
their projects. The disintegration of the Malayalee personality from being a
part of a large joint family to the role of a sole breadwinner of a nuclear
family might have tempted him to embrace any unethical mode to create wealth. Joint
families had enjoyed a code of ethics practised and mutually binding amongst
its members and positive and matured interventions take place whenever there is
a deviation. Where as in nuclear families, usually the sole bread winner would
take myopic decisions based on his own convictions, of which many may be immature
and unethical. Blindly mimicking the western styled life style and to finance
the same also would have tempted him to adopt any course to amass wealth. Malayalees
have a tradition and wisdom inculcated by their parents to cultivate a habit of
thrift by way of small bank deposits, recurring deposits etc. But no such
habits were taught at home now and instead, spending through credit card which
is over and above the normal income is admired more. Our last generations
taught us to spend only for felt needs and everything else was considered
extravagant. The decline in family values and bonds across the Malayalee
society is glaringly visible in every instance and is the prime social cause of
all emerging and existing social & financial evils.
Why the state of Kerala witness a sudden spurt of financial
vagaries? Crores of money swindled through politics, bribes, land dealings,
hawala and numerous other illegal transactions had made a certain proportion of
people becoming rich in shorter span of time. Being caught in petty crimes and cheating
is no longer considered as a social taboo and on the contrary may qualify one for
a successful business ahead. Besides, this felonious history may assure ones better
access to the political-antisocial-goons nexus to further initiate into new
fraudulent ventures. Money generated through unreal estate, corruption, bribe, cheating,
commissions etc. is being re-pumped into the economy through money lending
mafias. Many of the cheats who had convicted in earlier cases may be released
after few years of sentence and would re-emerge with new bogus names and ideas.
The acceptance they get among the top echelons of politics and governance and
the lesser degree of sentences they get send wrong signals to the society in
general and the youth in particular. The interdependency of mafias, political
leaderships and goons are getting stronger since each one is benefitted through
these transactions.
Government being the guardian of the general public cannot
stand aloof when similar cases are reported. In fact, it should take proactive
measures to curb if any such fraudulent moves are seen. It would not be even an
excuse to claim ignorance since the government runs an effective intelligence machinery
to sniff all under currents in the state. So emerging after having all the
damages done is a mere eye wash. Both Central and state governments can effectively
intervene since the finance portfolio comes under the concurrent list of Indian
Union. Reserve Bank of India or NABARD can take a lead role in monitoring
public investments with the participation of lead banks, SEBI, state finance
department, police etc. Accreditation or standards may be given to all bodies
which accept public deposits and investments. State as well as district level
panels comprising of officials from the above authorities may be formed to
award accreditation and monitor businesses. This would ensure public confidence
in selecting the right investment as well as avoiding the fake ones.
All that required is an iron will from the part of the government
in implementing strong measures in curbing financial frauds to be nipped at the bud itself, with the support
and help of its intelligence machinery. This would definitely pave an ideal climate
for financial investments for a better industrial growth. But how far the political
leadership would step in, in spite of its growing bedfellow nexus with the notoriety
is apparently doubtful. But above all, with the basic psyche of the Malayalee society where the cheated would never learn lessons from the past, we could expect similar cases of financial dacoits
re-emerge in the next decade as well.
