Photographer: Rana Chakraborty
Around 5,500 duped investors, mainly from Maharashtra, have been struggling since 1997 to get back their money (an average of Rs 1 lakh each) they had invested in Maxworth Orchard Ltd, which had launched a landfarming scheme in 1993.
Around 125 members of the Maxworth Orchard Investors’ Welfare Association (MOIWA) — an investors’ rights association formed in 1997 — recently held a meeting at Bandra to mobilise investors to come together and reclaim their money.
“The agreement with the company said the lands would be transferred in the investors’ names,” C D Sheshadri, who is the vice-chairman of MOIWA, said.
The agreement said the returns from the land would start accruing to the investors from the fourth year onwards and continue for 15 years, after which the investor would have the option of taking over the land himself.
“And so, the cost of maintenance for these 15 years was taken from each investor,” Sheshadri said, adding that the amount they paid was around nine times the value of the land itself.
In 1997, R Subramaniam, the then chairman of Maxworth, who now heads Sterling Resorts Limited, told the investors that the company had no money to pay returns or their initial investment. Also, most of the investors did not get sale deeds for the plots.
“However, the company never formally declared bankruptcy,” Sheshadri said.
This is when alarmed investors decided to form an association. In 1997 alone, over 550 FIRs were filed by them with the Economic Offences Cell of Mumbai police.
When the troubles started mounting for Maxworth, Subramaniam and the company’s directors moved the Madras High Court, which in 2002 appointed an administrator to assess their respective claims.
In November 2006, the administrator called a meeting of the investors in Chennai, where a majority favoured a proposal under which the company would sell the land and pay them on a pro rata basis.
But Sheshadri contests the claim saying most of the investors were not even informed about the scheduled meeting which was advertised through a small notice in one newspaper only. He says not even five per cent of the investors were aware of the meeting.
Investors also say that if the company is allowed to sell the land, they would not get their due share as no auction details were discussed at the Chennai meeting.
Already, 1300 investors have sent their objections to the proposal, the deadline for which was the first week of April, 2007.
Now, MOIWA is trying to get together all the 5,500 investors in the Western Zone to be able to show that they together own more than 50 per cent of the land in each project, a pre-requisite laid down by the administrator for them to be able to claim the ownership of the plots.
Despite repeated attempts, Subramaniam was not available for comment.
“Subramaniam is still the main boss at the Maxworth,” Sheshadri claims a Maxworth director told him.
This article first appeared in Mumbai Mirror, Times Of India: http://alturl.com/u5ye