Kannur: The Halal Fayida cooperative society, an Islamic banking venture backed by the CPM and launched with promises of profit-sharing, appears to have gone into limbo, leaving its investors chasing their money.

After waiting in vain for his money to be returned, K P Naser of Mayyil, one of the investors in the society, approached Chief Minister V D Satheesan through Taliparamba MLA T K Govindan. But soon after the issue came to light, the society returned his investment of ₹1 lakh, following which Naser withdrew his complaint.

The cooperative society, set up on the Islamic banking model, was inaugurated in December 2017. It proposed accepting interest-free share investments and using the funds for investments in the industrial, commercial and construction sectors, with the profits to be distributed among investors.

At the time of its launch, the society had said it would mobilise funds from people unwilling to invest in interest-bearing institutions and invest the money in these sectors. However, eight years on, the society has neither achieved its stated objectives nor presented its income and expenditure accounts.

MLA Govindan said complaints about investors being cheated by the society had been raised before the CPM district secretariat and district committee much earlier. The latest issue, meanwhile, also adds to a series of alleged financial irregularities involving the CPM in Kannur, including allegations of fund misappropriation in Payyannur and irregularities in funds collected to construct a building for the Kannur local committee office in memory of Kodiyeri Balakrishnan.

'There will be trouble,' warned Pinarayi
The then Chief Minister Pinarayi Vijayan had sounded a warning to the society at its very launch on December 24, 2017, cautioning that the venture could run into trouble without the necessary approvals.

"If the institution has not obtained the approval of the Cooperation Department in accordance with the rules, there will be difficulties later. An interest-free fund is a good thing. But there are certain conditions in the cooperative sector. In the present circumstances, officials in the concerned department may have taken a favourable position towards the Halal Fayida Society. But if that position is not in accordance with the rules of the department and a proper inspection is conducted later, there will be consequences," he had said at the inaugural function.

The society was launched under the leadership of M Shajar, then a DYFI leader, when P Jayarajan was the CPM district secretary in Kannur. Office-bearers of the society have been assuring investors who make enquiries that their money would not be lost and would be returned. However, neither the CPM nor these office-bearers have disclosed how much was raised through share investments or even how the money was utilised. The actual scale of the investments and their utilisation can be established only through a detailed inspection by the Cooperation Department.