Kasaragod: Police on Monday arrested Dambethamoole Vinod Kumar (50), who took deposits from people by claiming to double the money in 10 months through a clutch of financial companies under an entity called Global Business Group (GBG).
The arrest comes more than two months after Bedakam Police registered a case of cheating against him and on the day Vinod Kumar scheduled a press conference in Kasaragod town.
Bedakam police also arrested Gangadharan Nair P (66), a director of GBG. Nair was waiting at the Press Club when he was taken into custody. Vinod Kumar was picked up from a lodge, said Bedakam sub-inspector M Gangadharan.
Police have registered 18 FIRs against GBG's six directors, including Vinod Kumar. "We are arresting Vinod Kumar and Gangadharan in 17 cases," the officer said.
Bedakam police have written to the District Police Chief to transfer the case to Crime Branch. Police have frozen 18 bank accounts of the directors and GBG companies. Of that, police have got statements from eight accounts. They have Rs 11.66 crore in them.
On January 12, 17 depositors filed complaints against Vinod Kumar, accusing him of defaulting on repaying them. Police registered 17 FIRs based on the complaints under section 420 of the IPC (cheating) and also under relevant sections of the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019.
The other four directors of GBG are Muhammed Razak A C (41) of Alampady in Kasaragod; C Subhas (47) of Pilicode in Kasaragod district; Preejith C P (40) and Rajesh P V (39) of Maniyat in Trikaripur panchayat in Kasaragod.
Vinod Kumar and the other directors run GBG Nidhi Limited, a small savings company, at Kundamkuzhy in Bedadka grama panchayat.
According to the Department of Corporate Affairs, 'Nidhi' companies can be formed with the only objective of "cultivating the habit of savings" among people. A Nidhi company can raise money only by taking deposits (fixed, recurring, and savings) from members. The money raised can be used only to give loans, again only to members.
But Vinod Kumar asked depositors of GBG Nidhi to invest in BigPlus Fin Trading. In a Youtube video posted on July 27, 2022, the company said deposits in BigPlus would be doubled in 10 months. "If you invest Rs 1 lakh, you would get Rs 1.8 lakh post a 10% tax after 10 months. Before tax, it will be Rs 2 lakh," the company said.
Buying two shares of GBG Nidhi worth Rs 500 each was a precondition for investing in BigPlus, the company said.
Nidhi being a small-savings company cannot be used as a gateway for market-linked schemes and companies, said an investigating officer.
He said GBG Nidhi Limited has around 4,700 depositors. "We don't know how many of them are investors in BigPlus," he said.
An Android app is installed on the mobile phone of investors in BigPlus. "Their investments are reflected only on the app. They don't have any paper or digital receipts," the officer said.
A special branch officer tracking the company for more than two years said Vinod Kumar could have raised around Rs 800 crore by running schemes in the sleepy town of Kundamkuzhy.
Depositors come from Kozhikode, Thrissur, Kannur, Kasaragod, and also cities in Karnataka. "He was running a money chain scheme, taking money from depositors to pay off his older depositors. It was bound to go bust," the investor said.
GBG also runs a pyramid scheme promising depositors 10 per cent of the investment they bring in from new depositors and a 7 per cent commission on matching investment on the left leg and right leg.
Vinod Kumar, a native of Kundamkuzhy in Bedadka grama panchayat, claims to have assets worth Rs 2,000 crore on his website (drvinodgbg.com).
But in 2015, the Registrar of Companies (ROC) under the Ministry of Corporate Affair prohibited Vinod Kumar from registering any company in his name for five years after he raised money from the public in the name of starting 'Grameena Super Market' in Kannur and Kasaragod districts. The scheme went kaput.
Vinod Kumar had raised around Rs 31 crore in Kasaragod district alone, said police.
The Kannur Crime Branch charged him and 21 others with cheating, criminal breach of trust, conspiracy, and sections under the Prize Chits and Money Circulation Scheme (Banning) Act, 1978. Chief Judicial Magistrate Court, Thalassery, on December 26, 2022, set the next hearing on April 5.
The ban period ended on October 31, 2020. Twelve days later, Vinod Kumar registered GBG Nidhi Limited with ROC in Ernakulam, police said.
