Gold scheme owners agree payout
Manama, November 8, 2010
Owners of a gold scheme, who allegedly failed to pay their customers following the closure of the shop, agreed to refund 50 per cent of the investment immediately.
A meeting between the owners, Indian Embassy officials and investors was held last night at the embassy premises in Adliya.
Present were first secretary Ajay Kumar, owners Padothodi Hussain and Pauly Paul and around 400 investors.
Hussain and Paul agreed to pay 50 per cent immediately and the rest gradually.
Majority of investors attended the meeting and agreed to the deal, said Kumar.
'We had four to five rounds of talks with the owners, who finally agreed to pay the investors 50 per cent immediately.
'In the beginning, investors disagreed with the proposal, but later they agreed.'
Kumar also told our sister newspaper Gulf Daily News (GDN) that the owners owe over BD100,000 to the investors.
'According to our information, the owners owe the customers over BD100,000,' he said.
The owners refused to comment further, saying all the information was provided to the embassy.
Hussain and Paul opened the store four years ago and announced a gold scheme offering people a chance to invest BD10 per month and get the money back in gold at the end of the scheme.
For each BD20 deposit, customers were given coupons and entered into a monthly raffle for a brand new car and other prizes.
Many low-income Indian workers, including men and women, reportedly invested their savings in the scheme.
Paul earlier said his partner Hussain had filed a complaint against him at the embassy, saying he had taken 2kg of gold from the store.
Hussain has been living in Bahrain for 30 years and Paul for 15 years.
The GDN reported last month that the embassy had been investigating the matter after more than 200 people stormed the Star Mark Jewellery shop in Gold City, Manama, for the second time in two days.
The customers claimed they were promised refunds and demanded to be paid the money they had invested in the gold scheme.
They queued up near the shop for several hours, only to know that the owners wouldn't open the shop.
The GDN reported last year that thousands of Gold Link customers were affected after it had been hit by a cash-flow crisis caused by a rush of customers seeking to claim their gold.
Angry customers had gathered outside the jewellery shop in Gold City, claiming they had lost thousands of dinars.
However, an official at the store said that customers would get their investments back.
The embassy later intervened and appointed a law firm to represent the customers. The case is still on-going.-TradeArabia News Service