Bengaluru (Karnataka) [India], July 9 : A massive chit fund scam has rocked Bengaluru with over 400 victims coming forward to file complaints against a Kerala-based couple who allegedly cheated investors out of nearly Rs 40 crore before fleeing the country to Kenya.
According to Deputy Commissioner of Police, Bengaluru East, D Devaraja, the accused operated under the name A&A Chit Fund and hailed from Alappuzha, Kerala.
While speaking to ANI on Wednesday, DCP Devaraja said, "This was owned by a couple hailing from Alappuzha, Kerala. On 5th July, some people came to PS Ramamurthy Nagar and registered a complaint, saying that they had invested in the A&A Chit Fund company, and now the owners, the couple, are absconding."
DCP Devaraja added, "We registered a criminal case under BNS 318, 317, Chit Funds Act of 1982, and different sections of the BUDS Act (Banning of Unregulated Deposit Schemes Act, 2019).
Initial investigation revealed that the couple had sold their assets, including a house and vehicles, at undervalued prices, raising suspicions about a planned escape.
"During the preliminary investigation, we came to know that they had made preparations to abscond. They had sold their house and cars to different people at off-price. The accused have left the country on 3rd July for Kenya on a tourist visa...", DCP Devaraja informed.
To date, over 400 complaints have been registered, with the majority of victims originating from Kerala.
DCP Devaraja said, "From 5th July till today, the total number of complaints received is more than 400... The total amount cheated is almost Rs 40 crores... Most of the complaints are from Kerala."
Police are currently scrutinising bank records and financial transactions linked to the couple to trace the money trail and identify any possible accomplices.
Commenting on the incident, Congress leader Ramesh Babu highlighted that chit funds fall under the jurisdiction of the state; however, he also pointed to the Centre's responsibility in regulating non-banking finance companies (NBFCs).
Speaking to ANI, Babu said, "Chit Fund comes under the jurisdiction of the state because we have to give a license to the Chit Fund to function. If it comes under the RBI, the central government has to monitor microfinance. They have to put strict rules with respect to microfinance, especially on non-banking finance companies putting heavy interest on the customers."
Babu alleged that NBFCs were charging interest rates ranging from 21% to 32%, often in the guise of selling household items on credit.
"They are charging 21% to 32% in the name of home appliances. They are cheating. I request the central government to monitor this and also request the state government to control the chit fund and safeguard the interests of the investors," Babu said.
Meanwhile, one affected investor has claimed she was personally defrauded of Rs 30 lakh, stating she had known the accused couple for nearly 30 years.
Speaking to ANI, she said, "I have invested Rs 30 lakhs and I have known them (the absconding accused) for almost 30 years. The whole family has cheated. They have cheated on all 700 people. We even met DK Shivakumar and the home minister."