Fixed Income
Corporate Fixed Deposits: Unsecured, Not Fixed
Depositors continue to struggle to get their money back from certain companies
 
The bad news for those who invest their life’s savings in unsecured corporate fixed deposits (FDs) is that the government doesn’t really care about their plight. On 10 February 2016, Moneylife Foundation sent a compendium of 1,596 complaints representing the savings of over 1,138 investors, mainly senior citizens, to the ministry of corporate affairs (MCA). There is neither a response to, nor a formal acknowledgement of, our memorandum. It is our Right to Information query that led to four responses. In every one of them, MCA had merely acted as a post-office and forwarded the query to regional offices “for necessary examination and incorporation of findings thereof in investigation report.” 
 
So complaints against Jaiprakash Associates have been forwarded to Kanpur; those against Unitech Ltd to MCA’s regional director, north and complaints about Plethico Pharmaceuticals to regional director, north west. Only in case of Helios & Matheson (H&M), which has raised Rs55.25 crore from 6,540 depositors across India, was the complaint directed to the Serious Fraud Investigation Office (SFIO). Here, again, the only instruction is only for ‘examination and incorporation’ into its court-ordered investigation. 
 
Finally, we have yet to hear what happened to the complaints against Elder Pharmaceuticals and Bilcare Ltd which were listed as companies with the highest number of complaints from investors. A dozen or more squiggles on a copy of the memorandum indicate the number of eyes that have perused, at least the front page, but none has found it fit to order action that would lead to refund of investors’ money.  
 
In fact, a simple and effective action is possible even under the new Companies Act 2013 which clearly says that “Deposits accepted before commencement of the new Act have to be refunded within a period of one year or on becoming due which ever is earlier.” Had MCA been concerned, immediate refunds could have been ordered under this Section, to turn the heat on companies. After all, most investors listed by us have been running from pillar-to-post and have already filed complaints with MCA, company law board and every regulator they could think of. Less than 2% of the complaints get resolved. 
 
Moneylife Foundation has now been advised that the next course of collective action may be to approach the National Consumers Disputes Redressal Commission (NCDRC) or a class action. This would require investors to cross the threshold of a collective loss of at least Rs1 crore and for the court to be convinced that these are consumers of financial services who have been cheated. For starters, those trying to get their money back from Helios & Matheson, Elder Pharmaceuticals, Jaiprakash Associates, Unitech, Plethico Pharmaceuticals and Bilcare can send us details online here: https://www.surveymonkey.com/r/Corp_FD. But the battle is a long one and the outcome uncertain; so sensible investors would do well to follow Moneylife’s advice in future: It is not worth risking your hard-earned savings for a slightly higher interest rate. 

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COMMENTS

Bhuveneshwar Gupta

8 months ago

We are living in **** Raj, Comman man has no say! I am one of the sufferers.

Dr Anantha K Ramdas

10 months ago

I have shares in Unitech and these are in doldrums; but what is more worrying is that a close friend of mine has fixed deposits with them and they have neither paid interest nor responded to his entreaties. He needs to get both back soonest. How does he do it? what steps he should take? Can you please advice? thanks

AMOL JAVDEKAR

10 months ago

Sucheta Dalalji... Hats off to you and mOneylife foundation for the systematic way in which you are doing the noble( and uphill )task of trying to bring justice to thousands of investors.The write up which you had prepared was brilliant and very well represented. Sadly , authorities in regulatory agencies are inhuman , in spite of having the powers , being duty bound and being paid a hefty salary for it these regulators do nothing to help poor investors who are suffering day in and day out because of not being paid their invested money. Shame on these toothless regulators. It would be better to close them . At least burden on national exchequer will be reduced. As it is they are not doing anything worthwhile.... so even if these regulatory agencies are closed down what difference is it going to make ?

RAVI MENON

10 months ago

have investments in unitech and jaiprakash
no response from them

RAVI MENON

10 months ago

I HAVE INVESTMENTS IN UNITECH & JAIPRAKASH
NO RESPONSE FROM THEM

Narayana Balachandran

10 months ago

Why has Neesa Leisure not been included?

Mukund Dhaygude

10 months ago

if government is not concerned then we are also not concerned because we are the government and government is us.Yatha raja tatha praja.

REPLY

Mukund Dhaygude

In Reply to Mukund Dhaygude 10 months ago

choronke raj me chor banake hi rahana padega

TIHARwale

10 months ago

it should be recalled PVR Group Finance Director PVR Murthy of Yash Birla Groupwas arrested on January 31, 2014 after a case was registered against him, chairman Yashovardhan Birla, director Rajesh Shah and 11 other officials for default on repayment of deposits. so if a cheating complaint is lodged all that Judge needs to do is follow the above then only these corporates will understandwhat they will undergo for cheating FD investors

Baalamurugan L A

10 months ago

Thanks to moneylife for taking efforts to make this issue visible.. we need more support from govt and media to expose these issues. these companies were bigger names and suggested by leading financial advisors.. how can they be selfish? why are the regulatory bodies helpless? we need more NGO's coming forward to help these issues..

KB Rakheja

10 months ago

It is due to lack of any will to take action on part of politicians and bureaucrats nothing is happening to these serious defaulters. You never know that these companies may be funding some political parties in past and they are returning the favour now. what else explains the lack of action- corruption at the highest level. Legal recourse is so slow and cumbersome that most of the senior citizens don't have the energy and bandwidth to pursue.

manhar kothari

10 months ago

In these days of only self interest action ,moneylife foundation has taken up a issue of so many depositors who are not getting reply from any government departments.

J B SHAH

10 months ago

People go for FD'S, just because little higher rate of interest...& advice of their consultants, who advise them for the sack of higher commission rate, if the FD's are procured...People do not understand the RISK behind higher interest rates...ROC & GOVT. becomes silent viewers in the whole picture...we can not expect any help from GOVT. side.....we have to make efforts to make people literate about the risk in FD's....

Nikhil S Girme

10 months ago

Ms Dalal
Again a big thanks

Is this not a big story to be carried out by Media especially TV channels ? I know you have helped us quite a bit

But cant something bigger be done..We can have about 200 people from Pune and or Mumbai who can assemble in some place to meet Govt or CM of Maharashtra or somebody who can put us on right track

Why is govt so insensitive on this issue ?

Vaibhav Dhoka

10 months ago

This modes operindi is followed by MCA in case of complaints.In my complaint against Neesa Leisure Ltd.compint is sent to ROC Ahmedabad since no reply or action .I have often wrote in this column that it is regulators failure they are Dumb and Dead.

Panic button must for mobile handsets from next year

This follows a similar move for one emergency '112' number for availing services of police, ambulance and fire department

 

In a bid to make a mobile phone handset an effective tool for self protection, especially for women, the government has said no such device will be sold from next year without a single key panic button to connect the nearest redressal agency.
 
This follows a similar move for one emergency '112' number for availing services of police, ambulance and fire department.
 
"Technology is solely meant to make human life better and what better than using it for the security of women," Communications and IT Minister Ravi Shankar Prasad said here on Monday.
 
"I have taken a decision that from January 1, 2017, no cell phone can be sold without a provision for panic button, and from January 1, 2018, mobile sets should also have Global Positioning System inbuilt," Prasad said.
 
The notification did not specify which agency would connect the number, but sources in the ministry said the decision will be taken soon.
 
The Gazette of India notification said from January 1, 2017, no mobile phone handset manufacturing company shall sell in India: "The feature phones without the facility of panic button by pressing 'numeric key - 5' or 'numeric key - 9' to invoke emergency call."
 
It also said: "Smartphones without the facility of emergency call button by pressing the same for long time to invoke emergency call or the use of existing power on or off button, when short pressed thrice in quick succession."
 
The notification added: "With effect from January 1, 2018, no mobile phone handset manufacturing company shall sell the new mobile phone handset in India without the facility of identifying the location through satellite-based GPS."
 
The notification defined a feature phone as one that can access the Internet and play music but lacks provisions of an operating system feature of a personal computer. Smart phone, on the other hand, has all features of a personal computer system.
 
Some of the leading smartphone makers like Vivo, Xiaomi and Karbonn whom IANS tried to contact for a reaction declined to comment on the notification as of now.
 
In March this year, the government had proposed that people will have to just dial "112" for emergency help from police, ambulance or the fire department.
 
The telecom watchdog had proposed that all existing emergency numbers -- such as 100, 101, 102 and 108 -- be retained as secondary numbers, which would then be re-routed to the single emergency number 112.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Vinayak Mahamunkar

8 months ago

The Govt.of India has taken a good decision.

Ramesh Poapt

10 months ago

welcome move for safety/security/tracking!may save many many mishaps.

Param

10 months ago

if govt wants to track me using GPS on phone, will it be paying for adding that component to a basic phone?
what is the relevance of govt dictating features on a phone that is a consumer driven product?

Patanjali targets 150% growth in 2016-17

The company will be investing Rs1,000 crore this year in setting up five to six new processing units of its various products in different states

 

Patanjali Ayurved is expecting 150 percent growth in 2016-17, reaching an over Rs10,000 crore turnover in the current fiscal, its founder yoga guru Ramdev said here on Tuesday.
 
“We are targeting to cross Rs10,000 crore turnover in the current fiscal from Rs5,000 crore in 2015-16. We will grow by 150% this year,” Ramdev told reporters at a press meet.
 
The company will be investing Rs1,000 crore this year in setting up five to six new processing units of its various products in different states.
 
“We will set up five to six processing units in Assam, Maharashtra, Madhya Pradesh, Rajasthan, Haryana and Uttar Pradesh. Out of these, four will be fully functional within this year,” Acharya Balkrishna, managing director of the company, said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Ramesh Poapt

10 months ago

Sell FMCG companieas?!

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