Monday, 3 December 2018

The losing battle of AgriGold depositors

·       *  It is unreasonable to demand the government to pay the taxpayers’ money to depositors
·        *The High Court should form a committee and sit on the case on regular basis

It is really pathetic that after so many months, the AgriGold tangle is yet to be resolved and several thousands of crores of rupees is still with the unscrupulous businessmen who induced the gullible people to invest in their ventures.
A glance into the past reveals that the AgriGold Company started collecting deposits from people on the pretext of allotting them house sites and selling them real estate. It squarely attracted the provisions of the Andhra Pradesh Protection of Depositors Act which clearly prohibits the mobilization of deposits. The AgriGold collected money even from the street vendors with the inducement of huge interest on their deposits. For instance, a street vendor is asked to deposit ranging from Rs 10 to Rs 50 everyday. He could deposit the amount for 900 days and collect the matured deposit after completing 1000 days. If he pays Rs 10 a day, he could collect Rs 10,000 after the maturity period. This is how they are induced.
In addition to this, the AgriGold also collected deposits through their agents paying them hefty commission ranging up to 30 per cent. The depositors were told that they could select some land and got it registered in their name at the time of maturity of the deposit.
Meanwhile, the collected deposits were invested in various companies while some of the money was also used to buy land at various places in Andhra Pradesh, Tamil Nadu and Karnataka at throwaway price. The value of these lands is negligible but shown to the judicial court at inflated rates.
The Sahara India (Rs 30,000 crore), Peerless (Rs 30,000 crore), PACL (Rs 40,000 crore), Rose Valley (Rs 30,000 crore), Golden Forest (Rs 2,000 crore) and scores of other companies collected deposits.
The AgriGold, also like all these companies, returned money to the depositors as long as there was flow of new deposits. However, once the deposits stopped coming in, they started defaulting like all other companies earlier.
The Corporate Frauds Watch Society, a civil society organisation, warned people way back in 2008 about the danger of losing money. It had also filed a criminal case against AgriGold in 2010 as the mobilisation of the deposits itself is illegal. The police in the undivided Andhra Pradesh did not take any action to stop the company from taking deposits. By 2016, the company started defaulting and the bubble has burst.
Since the depositors of Sahara India, PACL, Peerless, Rose Valley and scores of other small players like Akshaya Gold, Abhaya Gold never got back their deposits, everyone thought it would be the same case for the depositors of Agrigold.
It is really heartening to note that the depositors of AgriGold have been fighting nail and tooth to get back their deposits. They moved the high court which agreed to see the properties of the company were auctioned and the money is paid back to the depositors. But the cunning management of AgriGold has been playing hide and seek to part with the ill-gotten wealth to pay to the depositors.
The latest ploy that the Hailand property did not belong to AgriGold has backfired resulting in the arrest of its managing director Alluri Venkateswara Rao for conniving with the management in duping the depositors.
It has been reported that the AgriGold management has collected more than Rs 6,000 crore and they have paid nearly 30 per cent to the agents who mobilised the deposits. In effect, the company had paid Rs 1,800 crore to the agents as commission. Surprisingly, nobody is talking about the commission paid to the agents and the agents are also crying foul stating that they are also victims of the scam. In fact, the agents should refund the commission as they are also part of the scam.
The leaders of the Left parties, on the other hand, are also raising a strange argument. They are asking the government to pay the deposits and realise the money by auctioning the properties of the AgriGold Company. It is really an unreasonable demand.
How could the government spend the taxpayers’ money to pay to the depositors? It surely would set a bad precedent. Everyone, who lost rather foolishly or greedily in such scams, would start demanding payment by the government. There are a number of small companies like Akshaya Gold, Abhaya Gold which also defaulted after collecting Rs 100 crore or more.
The only way out is the perfect investigation into the assets of the company and get the properties auctioned to pay to the depositors. Still, it is not as easy as it is said. The cunning management which stashed the cash away somewhere has been trying various ways to evade the repayment.