Court battle looms over Bahrain gold scheme
Manama, October 24, 2010
More than 20 customers, who are demanding refunds from a gold instalment scheme, plan to file a case against the owners today.
The Indian Embassy is now investigating the issue after more than 200 people stormed the Star Mark Jewellery shop in Gold City, Manama, yesterday 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 a gold scheme.
Store officials said that it had been hit by financial crisis, but were trying to cope.
The owners, Padothodi Hussain and Poli 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 BD10 deposit, customers were given coupons and entered into a monthly raffle for a brand new car and several other prizes.
Many low-income Indian workers, including men and women, reportedly invested their savings in the scheme.
The scheme was apparently attractive for low-income workers, who wanted to save money until they went back to their countries.
Paul said his partner Hussain had filed a complaint against him at the Indian Embassy, saying he had taken two kilos of gold from the store.
'Hussain promised everyone on Friday night they would get their money back in the morning, but he closed the shop and took all the gold,' he claimed.
'People started queuing in front of the shop in the morning, in the hope of getting their refunds. But he didn't open the shop.
'I got a call from the embassy after my partner filed a case against me, saying I took the gold, of which I don't have a clue. He has completely diverted the blame on to me, and now everyone is calling me.
'Embassy officials have asked us to solve the dispute or issues between partners and refund all the money.'
Hussain has been living in Bahrain for the past 30 years and Paul for 15 years.
Our sister newspaper Gulf Daily New (GDN) reported yesterday that more than 500 people gathered in the Gold City demanding their investments back.
Protesters refused to leave until Star Mark Jewellery refunded their money.
Police tried to disperse them but to no avail. Finally, senior officials from Star Mark intervened, promising to give their money back immediately.
Queues were formed and people started collecting their money, which continued until early morning.
Officials confirmed that Star Link, which is the main partner, was facing financial problems.
More than 20 people yesterday approached the Naim Police Station, where they were asked to return today to file a complaint.
'We were waiting in front of the shop on Friday night and next morning for the refund,' said C Thomas, who was among those at the police station.
'The owner asked us to queue on the first floor of Gold City and then removed all jewellery from the shop and closed the shutter, without giving us any answers.
'Some people didn't go for work and gathered in front of the shop, hoping they would get their money.
'They also called the owner several times, but his mobile was switched off.
'We have been waiting all this morning but no one has come to open the shop.'
Gold City management told the GDN they could not solve the matter and left it to be sorted out by the owners. 'We can't interfere, as it's their personal issue,' said general manager Shiju Francis.
Embassy officials confirmed they were investigating the issue, but would not comment further.
The GDN reported last year that thousands of Gold Link customers were affected after it had been hit by a cash-flow crisis created 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' case.-TradeArabia News Service