Chit fund owners accused of fraud after Kozhikode branch shuts down, investors left in lurch

Kozhikode: Customers and staff of a private chit fund firm have accused its owners of fleeing after shutting down the company without repaying their investments. The Mukkom police have registered cases against Malappuram-based Karat Kuries India Private Limited for cheating investors and breaching their trust.

Cases have been filed under Sections 316(2) and 318(4) of the Bharatiya Nyaya Sanhitha (BNS) against Managing Director K Santhosh and Director Mubashir, both residents of Edakkara, Malappuram.

On Wednesday, customers approached the police after finding the Mukkom branch office closed in the morning. The branch’s eight employees, including the manager, also filed complaints against the directors, alleging deceit and mismanagement.

The HR manager allegedly instructed the staff to close the office, citing a supposed court stay order. “They told us to shut down on a random morning. It’s outright cheating. Hundreds of investors have been defrauded,” the Mukkom branch manager told Onmanorama.

Hundreds of investors affected
Reports suggest hundreds of investors, many of whom had invested lakhs of rupees, are now struggling to recover their money. The Mukkom branch alone operated 10 chit schemes, each valued at Rs 1 lakh and with varying durations. Investors included local merchants, shop employees, and relatives of the staff, many of whom had contributed to multiple schemes.

“Now we, the employees, are facing angry investors. We even convinced family members and relatives to invest,” the manager added.

Complaints filed
Investor Mohammad Ajmal Chenattkuzhiyil from Kumaranellur, Mukkom, filed a complaint stating he is owed Rs 4,16,900. He had invested in two chitties at the Mukkom branch and five at the Mannarkkad branch in Palakkad district. He accused MD K Santhosh of misleading him and portraying an unregistered company as registered.

The Vyapari Vyavasayi Ekopana Samithi’s Mukkom unit has demanded swift action against the accused and recovery of the stolen funds. “They targeted local shopkeepers, and despite earlier complaints, authorities failed to act,” said the unit’s president, P Ali Akbar, and general secretary, V P Anees, in a joint statement.

Company background
Karat Kuries India Private Limited was founded in 2013 and opened its Mukkom branch six years ago. The firm operates 14 branches across various districts and is headquartered in Kooriyad, Malappuram.

Authorities are now investigating the scale of the alleged fraud, with pressure mounting to bring the perpetrators to justice.