Fraud and no punishment
Goa has been a fertile hunting ground for financial fraudsters, whether from within or outside the state. The state has been rocked by periodic financial frauds, some of them committed in connivance with politicians. A number of politicians are chairmen of various cooperative credit societies and cooperative banks. Some are actively involved in putting up proxy panels to seize control of such financial institutions and elections to the board of directors are fought with money and muscle power, given the high stakes involved. This puts a large question mark on the purpose of such institutions and why they should be headed by politicians and/ or their panels.
The news that substandard gold was pledged to the Quepem Urban Cooperative Credit Society’s Shiroda branch against loans of Rs 5.27 crore appears to be part of the trend to defraud naïve investors in this state. It appears that the rot goes much deeper and may not be arrested purely by suspending two bank managers and lodging an FIR against the goldsmith who certified the mortgaged gold as 22 carat. The fact that the loans can be granted by the branch manager without the decision being ratified by the board of directors is not only shocking but raises the fundamental point of why financial laws have not been tightened in the state. It is suspected that some of those who availed of the loans might be related to those involved in the fraud, and the real losers have been Goan shareholders.
In the past, at least two cooperative banks, and possibly even more, were involved in massive frauds connected to giving bad loans. These were then written off. Similarly, loans were sanctioned to borrowers without procuring adequate securities. Board meetings were held bypassing the regular monthly/periodic meetings to sanction loans in a hurry and a shockingly, a percentage of the loan was taken as ‘commission’ by the board of directors in advance. When such frauds were discovered in various banks, the government failed to punish the fraudsters, since they happened to be fellow politicians. A certain chief minister, who likes to project himself as man of great integrity, did not punish the chairman of the board of directors of a prominent cooperative bank even though the errant chairman belonged to the rival party. After holding out stage-managed threats, possibly to blackmail, no action was taken. And since public memory is short, the case has gone into cold storage, much like another similar case involving another cooperative bank. None among the chairmen or board members have gone to jail for the massive frauds in cooperative banks, since a good many of those involved have been politicians.
The shocking irony is that the concerned chief minister went out and bailed the bank with public money, all in the “interest” of shareholders. Strict action and legal proceedings should have followed, but evidence collection is obviously deliberately undermined to make the case against these politicians weak. As a result, the person/s involved get away scot free and are today all “respectable” men, even as they indulge in blue collar corruption. Scores of people have been defrauded by NBFCs and private institutions which illegally collect deposits and promise returns of up to 32 per cent from naïve investors, some of whom are public servants. Some such cases are in court for over 20 years. The moot question is why does the government not act against the fraudsters, who brazenly drive around in gleaming sedans, sometimes after serving a few days in jail at the most? Why are financial laws not tightened? All this sends out the signals that crime does indeed seem to pay in Goa. There is no effective deterrent punishment and frauds happen with regularity. What will happen to those responsible for the Quepem Urban Cooperative Credit Society fraud is therefore anyone’s guess.
Why does the government not act against the fraudsters, who brazenly drive around in gleaming sedans, sometimes after serving a few days in jail at the most? Why are financial laws not tightened? All this sends out the signals that crime does indeed seem to pay in Goa
