Chit scam: 40 per cent of investors are from Tamil Nadu

It is said that the administration was apprised of the problem by the investors only in September when residents of Palukal submitted a petition to officials of Kanniyakumari district about the fraud committed by the chit fund company. They demanded the administration to take action on Nirmal Krishna and help them to get back their money. After Palukal, investors from other parts of the district and from Tiruvananthapuram district staged a protest.  

The case was then transferred to Economic Offences Wing (EOW) of Tamil Nadu Police who along with Kerala police had jointly taken up the probe. Nirmal Krishna who had filed an insolvency petition at Tiruvananthapuram Court, had said that the total investments amounted to just Rs 600 crore.

However, police started acting on the complaints and arrested five people associated with the chit company, including two of its directors. Similarly cash and properties worth several crore were seized in the raids.

Also, as more than 10, 000 people in Kerala had invested their money, Chief Minister Pinarayi Vijayan had sought cooperation from Chief Minister Edappadi K Palaniswami, to solve the case and nab the accused.  

Sources also said that the company had acted as a benami for many of the politicians in Kerala. When demonetisation came into force, the company had helped them by exchanging their demonetised currency notes. 

The chit firm has been enjoying the confidence of many people in both the states. Since the early days it had been attracting depositors from Kanniyakumari and Tiruvananthapuram districts. The chit fund company was actually begun as Krishna Chits and Investments at Palukal village, bordering Kerala, in Kanniyakumari district in the year 1995 by K Nirmalan alias Nirmal Krishna. Later in 2015, the name was changed to Nirmal Krishna Nidhi ltd.