Lender goes under ground, faces boycott

The Federation of Surat Textile Traders Association has decided to socially and financially boycott a money lending firm connected with the Surat-based Century Co-operative Bank.

After its suspension, the Century Bank repaid over Rs 2.50 crore to the depositors over the next few days, which was reportedly taken from Suraj Corporation, a money lending firm, situated at Reshamwala Market, Ring Road.

This firm is said to be connected with the Century Group, which in addition to the bank, also runs seven dyeing mills in the city.

The firm which loaned big amount to the bank to bail it out has got into financial trouble and has to pull down shutters since September 4. The worried creditors, gathered outside the firm for their money, but to no avail.

Several meetings were held between the creditors, many of whom are connected with the textile industry, and the firm owners, to settle the dispute, but no result could be achieved as the firm owners expressed their inability to repay any money for the moment.

This prompted the creditors to approach the Federation of Surat Textile Traders Association. At a meeting of the Association it was decided to socially and financially boycott the firm owners.

"We have decided to boycott the firm owners. The firm owners run seven dyeing mills in Surat. We have decided that no trader will send any goods to these mills," Federation president Mahendra Saluja told Business Standard.

"According to our estimates, Rs 35-40 crore are stuck in Suraj Corporation. We believe the boycott will build pressure on them, and they might come forward with some sort settlement. We are also contemplating taking legal action against the firm owners," Saluja added.

Hari Malpani, who is said to be the main partner of Suraj Corporation, could not be reached for comments. Later his younger brother Natwar Malpani, who has taken Rs 1.45 crore loan from Century Bank, refused to give his reactions.

Hari Malpani has, however, released advertisements in certain newspapers, stating that he had parted ways with Suraj Corporation, a year back. He has claimed that he or any other member of Century Group is not connected with the firm in any manner and has threatened legal action against those attempting to malign their image.

Rajendra Chokhawala, who had invested a huge money in the money lending firm, said, "We are of the opinion that boycott of the firm owners will help us in recovering our money. It will also be a lesson for others. We will be meeting the federation office bearers again this evening to chalk out further strategy."

Surajmal, another important partner of the firm, is non-traceable since Suraj Corporation downed shutters. Though unconfirmed, sources inform that he is in custody of some of the creditors.