MCC Finance official resigns

When contacted, Vaikunth declined to comment on his decision. However, industry circles feel that his move was triggered as he felt that the interests of the depositors would not be protected if the company is wound up as per the RBI decision.

It may be recalled that chairman of MCC Finance AL Vadivelu and his son, managing director of the company Mr Jawahar Vadivelu had agreed to bring in Rs 3 crore for settling dues of Rs 5000 category depositors before June 2000. Of this, they paid only Rs 2.75 crore. Added to this was the regular recoveries from hire purchase transactions, which helped settlement of 30,000 depositors to the tune of Rs 10 crore for depositor categories covering Rs 5000 and Rs 10,000. The promoters were also to bring in Rs 36 crore over a period of 12 months towards settlement of dues to the depositors.

However, it is learnt that AL Vadivelu and his son Jawahar Vadivelu have not brought in funds as promised.

The Madras High Court in a recent order had said the company had defrauded the depositors for a sum of over Rs 200 crore by diverting the funds to MA Chidambaram group of companies. It may be recalled that the High Court had severe strictures on the chairman of MCC finance AL Vadivelu and his son Jawahar Vadivelu who happens to be the son-in-law of AC Muthaiah, chairman of fertiliser major, SPIC.

The MCC Finance case is expected to come up for further review at the Madras High Court sometime in the week end or early next week. The court had asked Vaikunth to continue in the position of special officer in the case ever since the first petition was filed and came up for hearing sometime in August this year.

By his decision to quit Vaikunth has put the onus of deciding the future of depositors on the High Court which will now have to take a decision on the mode of settlement of their claims.