New Delhi/Kochi, The National Company Law Tribunal has ordered the winding up of 14 entities linked to Popular Finance Group (PFG) and directed an examination to “trace the flow and end-use of funds” collected from the public.
A two-member Kochi-based bench of NCLT also appointed the official liquidator attached to the Kerala High Court for all 14 entities, noting that, as the “matter involves funds of the innocent members of the public at large” and a “prompt and expeditious action on the part of the company Liquidator is required and expected”.
Moreover, the National Company Law Tribunal (NCLT) also directed the official liquidator to apply within three weeks for constitution of a winding up committee to assist and monitor the progress of liquidation proceedings.
Within 60 days, “a comprehensive report shall also be filed indicating the assets identified and secured, claims received, funds and assets traced, recoveries made or proposed, proceedings initiated, and any further directions required from this Tribunal”, the NCLT order said.
The NCLT order came over a batch of petitions filed by the Serious Fraud Investigation Office (SFIO) against 14 PFG entities, which had initiated a probe following an order by the Ministry of Corporate Affairs (MCA) on January 7, 2021, into the affairs of PFG, which comprises seven companies and nine LLPs.
In its investigation report dated February 27, 2025, SFIO said PFG mobilised around Rs 4,700 crore from the public, of which about Rs 829.31 crore was attributable to the companies and LLPs covered by the probe.
The report alleged that the group collected deposits without the requisite regulatory authorisation, and after deposits substantially exceeded gold loans advanced, restructured in 2016 by incorporating Nidhi companies and LLPs.
The NCLT directed the liquidator to “examine the SFIO Investigation Report and other material available on record and trace the flow and end-use of funds collected from the public, including any diversion or transfer thereof to promoters, directors, related entities or other persons”.
It has also asked the liquidator to “identify the properties and assets acquired out of such funds and take appropriate proceedings” in accordance with law, for their “recovery, restoration or protection”.
The liquidator will also “examine the transactions and conduct of the promoters, directors, partners, officers and other persons concerned and, wherever warranted, initiate appropriate proceedings as per provisions,” said the NCLT order passed by a bench comprising Vinay Goel, Member Judicial, and Ravichandran Ramasamy, Member Technical.
He will also invite, “verify and adjudicate the claims of creditors, depositors, investors” and other stakeholders and maintain a proper record. He may also seek necessary information, records and assistance from the SFIO, Registrar of Companies, banks, financial institutions and other investigating or statutory authorities, the NCLT order said.
The PFG group entities are – Mary Matha Popular Nidhi, SAAN Popular Finance, Amala Popular Nidhi, MRPN Chits and SAAN Popular Fuels. Besides these five companies, the remaining nine are LLP firms.
During the proceedings before NCLT, no one appeared for PFG entities as respondents, and the tribunal proceeded against them ex parte.
In the case of SAAN Popular Fuels LLP, incorporated on November 13, 2019, for trading in petroleum products, the SFIO alleged that it carried on no such business and was used to collect public money disguised as capital contributions. It was alleged to have collected about Rs 21.25 crore and defaulted on about Rs 1.26 crore of repayments.
The tribunal held that the LLP’s failure to file its Statement of Account and Solvency and annual returns for five consecutive financial years was, by itself, a ground for winding up under Section 64(e) of the Limited Liability Partnership Act. It also found it “just and equitable” to wind up the LLP under Section 64(f).
In the Mary Matha Popular Nidhi order, the tribunal held that the grounds under Sections 271(1)(c) and 271(1)(d) of the Companies Act, 2013, were made out, covering fraudulent conduct of affairs and default in filing financial statements and annual returns for five years.
Noting the absence of any material showing a viable business capable of being preserved, the tribunal said permitting the company to continue “would serve no useful or legitimate purpose”.
“The material placed by the Petitioner remains unrebutted,” the bench observed in both matters, while adding that the absence of a contest did not dispense with the need to establish the statutory grounds.
The tribunal said notices sent to the respondents had come back with the postal remark “addressee left without instructions”. Notice was then published in Malayala Manorama and The New Indian Express on July 30 and August 7.
NCLT in its order also said the winding-up proceedings must not prejudice or unnecessarily duplicate the criminal case pending before the Special Court in Ernakulam against the PFG entities and their directors and designated partners.
