KASARAGOD: A day after the local body elections were declared, Manjeshwar MLA and leader of the Indian Union Muslim League (IUML) M C Kamaruddin was arrested in connection with the duping of depositors in his gold business.
A special investigating team, led by assistant superintendent of police (ASP) Vivek Kumar, questioned Kamaruddin for six hours before he was arrested at 4 pm.
This is the first time he was questioned by the police in the case, though the first complaints against him were filed by three depositors on August 28. They alleged that the MLA duped them of Rs 36 lakh.
Since then, 115 depositors in the gold business -- run under the brand name Fashion Gold -- have pressed charges of cheating (Section 420 of IPC) against Kamaruddin. Criminal cheating is a cognizable non-bailable offence.
He was questioned over 77 complaints which alleged that the MLA had duped them of Rs 13 crore.
Kamaruddin was, however, arrested in connection with the first three cases.
The ASP told reporters that the police had evidence of the MLA defrauding his depositors of Rs 15 crore.
Earlier, the MLA's business partner and religious leader T K Pookoya Thangal was questioned for nine hours by the special investigating team and let off. He has been summoned to the District Police Chief's office and is likely to be arrested on Saturday.
To be sure, Thangal faces the same charges pressed against Kamaruddin. Kamaruddin and Thangal started at least four gold jewellery companies since 2006 and reportedly raised Rs 140 crore from 800 depositors. In all the companies, Kamaruddin was the full-time director and chairman, and Thangal was a director and managing director.
The four companies had stores in Kasaragod, Cheruvathur, Payyannur, and Thalaserry. The four stores folded up between October and December 2019. "But the jewellery companies continued to accept deposits from the public even after that," said C Shukkur, an advocate who works with the complainants.
Kamaruddin used to promise high-interest rates above 12% and 14% to the depositors and was reportedly servicing the loans by accepting more deposits -- a classic feature of Ponzi schemes.
To be sure, bonds fetched only around 8% to 9%, and banks gave just 5% to 6% as interest.
The IUML alleged that the questioning and arrest of Manjeshwar MLA M C Kamaruddin was a political spectacle timed for the local body election. "Though the complaints against him were filed in August, he was questioned for the first time today and now they are threatening to arrest him," said Kasaragod MLA N A Nellikkunnu. "These developments come a day after the local body elections were declared," he said.
Kamaruddin had moved the High Court of Kerala seeking quashing of the criminal FIRs saying the cases were civil in nature, he said. "I understand that the case is coming up for hearing on Tuesday. The police are jumping the gun by trying to arrest him today," Nellikkunnu said. To be sure, the case was set aside twice in the high court.
Kasaragod IUML treasurer Kallatra Mahin said it was a case of business collapse and not cheating. Fashion Gold has been paying dividends since 2006. Mahin is one of the investors in the gold business.
The party leadership had entrusted him with the responsibility to prepare a white paper on Kamaruddin's business, and Mahin concluded that the MLA was not in a position to return the money.
The IUML leadership has called for a meeting in Kozhikode on Sunday to discuss the development.
'My arrest on the direction of government'
Manjeshwar M C Kamaruddin said he was arrested on the direction of the government. "My arrest is politically motivated. My case is coming up in the high court on Monday, but they did not even wait for that," he said.
He has moved the high court to quash the criminal FIRs against him, saying the cases were civil in nature.
He said he was served no notice but was called to the District Police Chief and arrested. "All these cannot destroy me," he said.
Cases against MLA filed by IUML supporters: CPM
Manjeshwar MLA M C Kamaruddin's allegation that his arrest was politically motivated was a face-saving statement, said the CPM.
It could be politically motivated if the complaints were filed by CPM supporters, said CPM district secretariat member V P P Mustafa. "In this case, the complainants are sympathisers and members of the IUML, and the evidence was produced by the IUML supporters," he said.
Mustafa said the police did a thorough job of going through 113 complaints and collecting evidence. "That is why they were able to arrest the MLA on the same day he was summoned for questioning. That is why the court accepted the arrest memo," he said.
One of the charges against the MLA and his partner Pookoya Thangal was they misused the trust they enjoyed among IUML supporters to raise money for their business.