Brothers and promoters Sujith Cherian and Sunil Cherian of Kerala Fashion Jewellery (File)
Two promoters of the popular Kerala Fashion Jewellery (KFJ) have been arrested in Chennai for allegedly swindling 26 crore deposits made by at least 1,689 customers under various gold purchase schemes between 2016 and 2019.
Brothers Sujith Cherian, the MD, and Sunil Cherian, director, were denied bail by the special judge court under Tamil Nadu Protection of Interest of Depositors.
"Yes we have arrested both of them. The court has denied them bail. In 2019 the police had filed a case of cheating, criminal conspiracy, criminal breach of trust and inducing delivery of property," Suresh, DSP, Economic Offences Wing, told NDTV confirming the development.
There is hope that this could pave way for some kind of recovery.
Sridevi Ramakrishnan, during an emergency in 2016, had pledged her 312 gram gold for a 5.4 lakh loan under KFJ's Gold Loan Scheme.
Though she repaid the loan, she managed to get back only 15 grams of gold. "They promised to settle it with the sale proceeds of their property but nothing happened", said Ms Ramakrishnan. The schemes were endorsed by actor Praksh Raj and actor-director Lakshmi Ramakrishnan.
Jiji Mathew, an IT professional, had deposited a total of Rs 5.7 lakh since 2017, paying Rs 25,000 a month under a scheme that would block gold at the lowest price. "I was hopeful the gold saving chit scheme would help in my daughter's higher education. But they shut shop in 2019 and our plans crashed," he said.
"Arrest was long pending as they were just buying time in the name of negotiations. There are hundreds suffering in silence. At least now authorities should freeze their properties and initiate recovery".
S Lingasamy, a civil engineer who had filed the first complaint, had joined a five-year scheme for buying 100 gram gold at Rs 1,999 a gram had lost two lakh rupees then in this scheme alone. He had made another investment too. The appreciation in gold prices would, he thought, help in his children's education.
"The mother of the brothers and wife of one of them too are KFJ directors. Why haven't the police arrested them?" he asked.
The Cherian brothers, in an affidavit, blamed it on a false campaign by vested interests, which they claim triggered mass withdrawal of deposits and consequently led to the closure of their gold stores.
Though they sought bail to settle depositors by disposing their mortgaged properties, the court denied it citing possibility of " tampering of evidence".
The prosecution has claimed that the brothers diverted funds to benamis and friends.