The Insolvency and Bankruptcy Code has come to the rescue of a Kollam based Chartered Accountant and his wife in their fight for justice in the face of a massive fraud committed by a Congress leader in Kerala known to be close to former Chief Minister Oommen Chandy and former Union Minister Vayalar Ravi.
Shaffi Mather, former economic advisor to OommenChandy and his father KMI Mather, himself a veteran Congress leader and the State’s football boss, had allegedly cheated gullible investors of crores of rupees promising high-end luxury apartments.
Mather Projects Private Limited, their company, had offered to sell luxury apartments in Kochi. More than 30 professionals working in India and abroad invested heavily in the project, some as far back as 2007. K Vijaya Mohan Valiathan, a chartered accountant and his wife Seema K Nair booked in February 2014 a 12th floor luxury apartment in the proximity of the scenic Periyar River.
“The Mathers were people known all over the State and they were a known name in the property development business at the time we invested. Shaffi Mather was the one who accompanied the then Chief Minister Oommen Chandy to the World Economic Forum session at Davos and there was no need to suspect their credentials,” Valiathan told The Pioneer.
The Valiathans paid Rs 46 lakh as the first two instalments through bank drafts by February 2014. “The Mathers had assured that they would deliver the apartment by December 2014. But even after three years, they failed to hand over the flat and the construction had come to a standstill by January 2014 itself,” said Valiathan.
When contacted, the company told him that there were some issues between the brothers and everything would be settled soon. ‘But when they started conjuring new construction strategies each time we called them, we were convinced that the money was as good as gone and there was no chance for us to recoup the amount we paid them,” said Valiathan.
In 2016, the Government of India enacted the Insolvency and Bankruptcy Code which was to revolutionise the borrowing culture and etiquette in the country. Through an amendment later, home buyers were accorded the status of ‘financial creditor’ at par with banks and financial lenders. The code resulted in the setting up of the Insolvency And Bankruptcy Board of India, a regulatory authority to take to task delinquent companies like Mather Projects which were taking customers for a ride. Hitherto there were no safeguards to save the homebuyers from the crooks who were enjoying “field days” TheValiathans seized this opportunity to expose the sordid deeds that were being committed by the company for more than a decade towards its hapless customers.
When he saw the number of prospective apartment owners who have been cheated by fly-by-night operators, the first thing Vijaya Mohan Valiathan did was to get qualified as an insolvency professional to help the victims. He also approached the National Company Law Tribunal which on 30th November 2018 admitted his application to initiate insolvency proceeding against the company. It also ordered for appointment of a Trivandrum based Insolvency Professional s the Interim Resolution Professional.
The Mathers who remained incommunicado till then rushed to Valiathan with a plea not to go forward with his complaint and sought more time to complete the Project and hand over the apartment. Interestingly, the so-called family dispute that was touted as the reason for distress of the company had become a thing of the past as Shaffi and his brother had resolved the internecine “dispute” in the family.
Valiathan stood his ground and the director board of the company got dissolved. Padmakumar, the IRP appointed by the NCLT would administer the process of identifying a prospective buyer who will take the company and its projectsforward or secure an order for its liquidation. “It may take some more time for me to get back my money if at all! I am now at least assured that I am resting in the credibility and the timelines provided by Law” says Valiathan. He feels the IBC, 2016 has vested in customers who are cheated by operators like Mather Projects the power to either salvage their life savings or dislodge fraudsters from running companies by getting them handed over to more dependable and forthright managements.
This is the first instance from Kerala where a “victim” got justice from the amended Insolvency and Bankruptcy Code, which in normal situation would have taken decades.
