Pathanamthitta: The proprietors of Popular Finance had diverted funds to several other firms flouting all rules, according to the police. They had committed the grave financial fraud by accepting deposits and conducting transactions at the branches of Popular Finance and transferring the money to 21 other companies without the knowledge of the customers, said officials.

The Crime Branch of police in Kerala had earlier registered a case against Popular Finance in 2014 after the Reserve Bank of India (RBI) issued stringent guidelines to non-banking financial institutions regarding acceptance of deposits and lending of loans. However, Popular Finance continued its operations after obtaining a stay against the Crime Branch move from the High Court. Soon, Popular Finance was registered as several firms, purportedly to follow RBI’s guidelines.

The deposits were diverted to companies named Popular Exports, Popular Dealers, Popular Mini Finance, Popular Printers and others. As a result, Popular Finance, which was not allowed to accept deposits from not more than 200 people, had thousands of customers at its 250 branches, said the police. Moreover, gold pledged with Popular had been transferred to other financial firms.

The police also found records which showed that Roy Daniel, the owner of Popular Finance who surrendered the other day, had made several investments in the Gulf countries. The family also had investments in Australia.

Police said that even though the owners had claimed that the crisis at the company was caused by the lockdown, there was ample proof indicating that a well-planned fraud had been executed.

Owners remanded

Meanwhile, the Chief Judicial Magistrate Court-2 in Thiruvalla remanded company owner Roy Daniel, wife Prabha Thomas, their daughters Rinu Mariyam Thomas (Chief Executive Officer) and Riya Ann Thomas (Member, Board of Directors). They were produced before the court through video conferencing after being questioned on Saturday night and Sunday.

A separate investigation would be carried out into the transfer of money abroad. The police have also launched a search for Reeba, another daughter of Roy Daniel and the fifth accused in the case. A probe is on into the involvement of more persons in the case.