Popular Finance Scam: Kerala HC allows State to approach the Centre for a CBI Inquiry, directs attachment of owners' properties

In a small victory for investors in the ill-fated Popular Finance fund, the Kerala High Court has allowed the State Government to approach the Union Government to demand a CBI Inquiry into the dealings of the group..Popular Finance, headquartered in Pathanamthitta, has been in the business of extending gold loans and receiving deposits from the public since 1965. It is a family-owned business..The group's dealings came under the scanner last month after investors raised complaints about not receiving returns on investments. Investors were lured by the promise of a monthly interest of 18%, which was was found to be nothing but amounts from other deposits. .Aggrieved investor groups and individuals filed pleas in the High Court seeking for the attachment of the Popular Group's properties as well as a probe by the CBI. .Justice VG Arun has admitted the pleas and granted interim relief in the matter yesterday after the State Government submitted that it was not averse to a CBI Probe..Justice Arun allowed the State Government to approach the Centre seeking a CBI probe, and also directed the group's various properties to be attached pending further orders by the authority that would oversee the investigation. .On the suggestion of a counsel that the State Police Chief may be asked to provide logistical support to the investigating team, Justice Arun added this aspect to his interim order as well, while describing the suggestion as 'welcome.'.The question of whether the investigations should proceed under the Kerala Protection of Interests of Depositors in Financial Establishments Act, 2013 or the Banning of Unregulated Deposit Schemes Act, 2019 is left open, Justice Arun added..While the former is a State legislation, the latter is a Central legislation that contains specific provisions against finance frauds of the kind run by Popular Finance. .Directing the service of notice upon the respondents lodged in prison, Justice Arun indicated that the matter may be posted early next month, for the evaluation of the status of investigations and action taken.