"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.