Firm returns money to 19 investors

BHUBANESWAR/BERHAMPUR: A money circulation company, Bharat Integrated Social Welfare Agency (BISWA), on Tuesday returned deposits of 19 investors with 12% interest at a designated court, set up to hear chit fund cases, in Berhampur.
This was for the first time that a chit fund company refunded investors in the presence of a judge. The court had earlier directed the company's chief, Khirod Malik, to return deposits of the duped investors before it took up his bail petition.
"An agent of the company handed over the cheques to the depositors on the court premises," said special public prosecutor Bijay Pradhan.
On October 27, 2014, the Economic Offence Wing (EOW) of the Crime Branch arrested Khirod, brother of BJD MLA and former minister Pramila Malik, on charges of floating two unlicensed money circulation firms-BISWA and Credible Micro Finance-and duping investors of more than Rs 10 crore. "Khirod's Credible Micro Finance was a non-banking financial company. It was not authorized to collect deposits from people. But Khirod collected crores of rupees between 2006 and 2012 by violating the Reserve Bank of India (RBI) norms. The RBI had cancelled the firm's licence in June last year," said an EOW officer.
In 2012, the Gajapati administration received complaints from some investors and started a probe into Khirod's company. A report was sent to the RBI, confirming that the company collected crores of rupees illegally by promising to double the amount in two and a half years, EOW sources said. The RBI had issued a show-cause notice to Khirod and asked him to return money to the investors.