KASARAGOD: The collapse of the gold jewellery business of Manjeshwar MLA MC Kamaruddin is snowballing into a major political controversy with more depositors having come forward to press charges of corruption against the IUML leader.
To date, 12 cases of cheating (Section 420 of the IPC) have been registered against Kamaruddin in various police stations. While FIRs on four more complaints filed at the Kasaragod Town Station have not yet been registered, two cases of cheque bounce have also been registered against the MLA.
According to sources, 18 persons are planning to take the MLA to court after Fashion Gold failed to return the deposits. Cumulatively, Fashion Gold - whose chairman is Kamaruddin and managing director is Islamic religious leader Pookoya Thangal - owes the 18 depositors Rs 2.64 crore.
The cases would be investigated by DSP Satheesh Kumar A of the District Crime Branch. "Since there are many cases, I have assigned them to a DSP who investigates economic offences," said Kasaragod district police chief Shilpa Dyavaiah.
The IUML and its partner the Congress have refused to comment on the development. "It is an internal matter of the Muslim League and related to a business run by an IUML leader. I have nothing to say," said Congress district president Hakkim Kunnil.
Kasaragod MP and Congress leader Rajmohan Unnithan said he had shared his opinion with IUML national president PK Kunhalikutty and IUML state general secretary KPA Majeed.
To be sure, MC Kamaruddin is the chairman of the United Democratic Front (UDF) in Kasaragod. Though there were reports that he would be removed from the post, party leaders said it was not discussed.
The LDF and the BJP are gunning for Kamaruddin's resignation. The Yuva Morcha, the youth wing of the RSS, took out a march to the Taluk Office in Manjeshwar demanding the resignation of the MLA. Yuva Morcha district president Dhananjayan Madhur said the state government should hand over the investigation to central agencies. He alleged that Fashion Gold was a cover to defraud the public.
The LDF, in a statement, said Kamaruddin used his social clout as a leader of the IUML and MLA to raise at least Rs 150 crore for his gold business. "He should step down from the position of MLA against the backdrop of the allegation that he had cheated his depositors," it said.
The LDF said it would organise protest meetings and public trial of the MLA at 20 different centres of the district on September 16. The LDF also demanded action against the MLA in connection with the illegal purchase of a Wakf property by an educational trust run by him.
On February 20, the Jamia Sadiya Islamia, an organisation of EK faction of Samastha Kerala Jamiat-ul-Ulema sold 2.03 acres in West Trikaripur to the Trikaripur Charitable and Educational Trust, headed by Kamaruddin.
Interestingly, the Jamia Sadiya Islamia is headed by T K Pookoya Thangal, who effected the sale.
Thangal is also the district president of the Sunni Mahal Federation and president of Trikaripur Muslim Jamaath; and importantly, he is the business partner of Kamaruddin and managing director of Fashion Gold.
After the sale became controversial as it is illegal to buy or sell Wakf properties, Samastha announced that it was cancelling the sale.
Fashion Gold started in 2007 had four jewellery stores in Kasaragod, Cheruvathur, Payyannur andThalaserry. Six months ago, all four stores were closed.
While the business model of Fashion Gold was to raise money directly from the public, the investors got into an agreement with Fashion Gold that they would get a fixed dividend every month, and return the entire deposit on a three months' notice.
"The agreement on a stamp paper was signed by Kamaruddin and Pookoya Thangal," said KM Muhammed, whose wife Noor Jahan invested Rs 10 lakh in Fashion Gold in 2008. Noor Jahan died six months ago.
Her mother Khadeeja M too invested Rs 10 lakh in Fashion Gold. "My father-in-law sold his restaurant in Mumbai and put in the money in Kamaruddin's business," said Muhammed.
Initially, the agreement was that they would get Rs 12,000 every month for the Rs 10 lakh invested. Later, Fashion Gold reduced the dividend to Rs 10,000 and then halved it to Rs 5,000, said Muhammed. "One year and a half ago, we asked Fashion Gold to return our money. But it did not and now the business shut down," he said.
Khalid C, another investor, had deposited Rs 78 lakh in two gold businesses of Kamaruddin. The other complainants have invested between Rs 3 lakh and 30 lakh, taking the total to Rs 2.64 crore. Kamaruddin said he was not involved in the day-to-day running of the business but was making efforts to return the money. He said that the CPM was using the business misfortune to reap political gains.