Chennai, June 15 (): Moolchand Exports scam worth Rs 100 crores has been swept under the carpet by officials.
Dr Sharad Sikchi MBBS said many of the investors including relatives had bought shares in Moolchand group of companies and also invested in many schemes floated by them.
Promoted by B Kothari and family, Moolchand Exports Ltd (MEL) was incorporated on Nov.2’88. The company had three divisions – leather, cashews and orchards.
MEL had transferred its leather business (cap. : 72,000 garments) to its subsidiary, Champion Leathers (formerly Moolchand Leathers). The company diversified into cashew processing and exports during 1992-93 and claimed to have 16 factories at Mangalore and Quilon with a total processing capacity of 16,000 tpa.
It further claimed that it has ventured into growing cashew as a backward integration and also into growing inter-crops. MEL’s orchard project was said to be located in 12,000 acres in Tamil Nadu and with the capacity to produce 9200 tpa of raw cashew nuts.
The company told investors about its plans to export groundnuts, edible oil and soya beans. MEL also claimed to be diversifying by entering the shipping sector.It took over Suvarna Securities Ltd and renamed it as Moolchand Finance Ltd and sold shares.
The owners floated another firm Moolchand Exports / Leathers Ltd Ramapuram and Moolchand Industries Ltd. All these firms were started with the intention to cheat investors of their money. Those who invested were promised bonus shares.
These companies closed and since the debt recovery tribunal started proceedings in 25/3/1997 to recover dues owed to banks like Tamil Nadu Mercantile Bank, SBI, Global Trust Bank and ICICI. The investors were told to wait till this was cleared.
Investors were informed by deputy official liquidator Madras High Court in 2012 that proceedings are underway but no further news has come. SEBI the stock exchange regulator had on July 2001 asked State Government to initiate criminal and civil cases against the companies but no action seems to have been taken.
Promoter Pradeep Kothari is said to be absconding. Moolchand Finance Ltd continues to own a building located in Ethiraj Salai, Commander in Chief Road, Chennai – 600105.
The seizure of the property and putting it up for auction and proceeds from that can help to pay the investors. Authorities and banks have turned a blind eye to this asset said Dr Sikchi.