Halal Fayidha Co-operative Society denies investment scam allegations

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Halal Fayidah Co-operative Society Limited, Kannur, an Islamic banking initiative launched under the leadership of the CPI(M), has denied allegations that it has collapsed or that an investment scam has taken place. The society said it had never accepted deposits and that the money collected from members constituted only share capital.

The clarification followed a complaint by Mayyil resident K.P. Nasser alleging that money invested in the society had not been returned. Mr. Nasser submitted the complaint to Taliparamba MLA T.K. Govindan, who subsequently forwarded it to Chief Minister V.D. Satheesan, bringing the allegations against the society into the public domain.

Soon after the allegations appeared in the media, the money was returned to Mr. Nasser, following which he withdrew the complaint. However, the MLA sought an inquiry into the entire issue, citing claims that other shareholders also felt cheated by the society.

Meanwhile, in a statement issued on August 16, society president C. Abdul Kareem said the allegations of financial irregularities were baseless. He said the society was registered on August 25, 2017, and began operations on November 13 that year.

“Although the society’s bylaws contained provisions permitting it to accept deposits, no deposits had actually been accepted from anyone,” he said, adding that the only money collected from members was share capital raised to meet the society’s objectives.

According to Mr. Kareem, the society collected ₹17.28 lakh through 6,913 shares. Of this, ₹6.65 lakh was spent on facilities required for its operations, including office infrastructure, furniture, fixtures and computer equipment. The society also said its accounts were audited by the Cooperation department for 2017-18, 2018-19 and 2019-20 and that no financial irregularities were reported in the audit records.

The 2018-19 audit report, it said, recorded that the management committee had successfully taken forward the organisation’s initial activities.

Mr. Kareem said the society had originally planned to establish a large-scale meat-processing plant. It had sought land through KINFRA, prepared a project report and submitted an application for registration. However, the project could not progress owing to circumstances including the COVID-19 pandemic and floods.

“Under its bylaws and general rules, shareholders can seek withdrawal of their share amount after completing three years. The share amounts had been returned to members who submitted requests,” Mr.