In July 1996 Central Crime Branch of the Chennai City had to handle a completely new type of complaints against Sneham Finance. One Aravindhan who managed about 20 firms, defaulted in repayment of fixed deposit collected from public of Chennai and other places. Hundreds of people filed their complaints in the Central Crime Branch, Chennai City .

              These unincorporated bodies collected about Rs.10 Crores from about 6,000 depositors and defaulted. Little later, the Central Crime Branch had to handle another case against Eswari Group of Finance Firms in which about 12,000 investors had to loose about Rs.27.5 Crores. The above frauds on public by unscrupulous financial institutions and corporates continued one by one. Action against the frauds were taken only under IPC sections of cheating and fraud.

                As most of the financial institutions which collected deposits from public and defaulted repayments were likely to escape from the clutches of law, the Government of Tamil Nadu (headed by the Hon'ble Chief Minister Kalaigner Thiru M.Karunanidhi) felt the necessity of an Act to protect the interest of investors and to punish the culprits with maximum punishment of 10 years. Thus the Tamil Nadu Protection of Interests of Depositors Act was enacted in the year 1997 itself. Tamil Nadu is the first state to enact such an act in the country. Further in order to conduct speedy trial of these cases a Special Court was also created by the Government.

                 While hearing the company petitions in Anubhav case, the Hon'ble High Court observed the necessity of involving experts in various fields like law, accountancy, banking, shares, real estates, valuation, computer etc. in the investigation of such huge frauds on public by corporate and other bodies. The Hon'ble High Court had directed the Government to create a separate investigating agency consisting of experts to investigate such cases.

                  As the City Crime Branch and the local Police which were not equipped with the expected expertise in the investigation of such frauds, the Government decided to create a separate wing for preventing and investigating frauds on public by financial institutions. Thus the Economic Offences Wing-II was formed and started functioning from 01-01-2000.

                  In order to protect the interest of the depositors in Financial Establishments, Government of Tamil Nadu enacted the act "Tamil Nadu Protection of Interest of Depositor's (Financial Establishments) Act 1997". Tamil Nadu is the first state to enact such an act in the country. Several other states have now enacted similar Acts on the lines of the Tamil Nadu Act.

                   (A separate wing in the police department called Economic Offences Wing - II for investigating the cases against the Non-banking Finance Companies and Unincorporated Financial Establishments was created by the Government of Tamil Nadu in G.O.Ms.No. 1697/99 on 24-12-99. The wing started functioning from 01-01-2000 headed by the Inspector General of Police, Economic Offences Wing - II assisted by a Superintendent of Police under the direct supervision of the Addl. Director General of Police, Economic Offences Wing. The above wing is functioning under an Addl. Supdt. of Police at headquarters, Chennai and under Dy.Supdts. of Police in all the Police district headquarters except in the Commissionarates. In total 1024 officers and men are deployed for this wing in the State. The officers are trained in CBI academy at Gaziabad and by RBI at RBI Staff College, Chennai. The wing is utilizing the services of experts in Law ,Accounting ,Computer etc., during the course of investigation.)

Status For the Year:

                  The Economic Offences Wing - II upto 31.10.09 had registered 1397 criminal cases against defaulting financial institutions, out of which 128 cases are under investigation and 338 cases are pending trial. Further action was dropped in 470 cases, 74 cases ended in conviction, 200 cases ended in acquittal and 76 cases were transferred to the local Police.   

                  In these defaulted Financial Institutions, about 11.39 lakhs depositors have deposited a sum of Rs.2213.51 crores. So far, a sum of Rs.1152.14 crores was repaid to the 6.75 lakhs depositors from these financial Institutions. The remaining amount of Rs.1061.37 crores, is yet to be repaid.

                  Properties approximately worth Rs.1941.50 Crores are identified in these cases so far. Based on the proposals sent by the Headquarters and District Units the Government have issued orders authorizing attachment of properties approximately to the worth of Rs.1508.70  Crores. Attachment proposals were not sent for some of the cases in which other agencies like Official liquidator, Administrators and Official assignee have been appointed by the Hon'ble High Court.

                   All efforts are being taken to liquidate the balance identified properties worth Rs.432.80 Crores, in the defaulted financial institutions and to get back the money from the borrowers of the defaulted financial institutions by various agencies like Official Liquidator of the Hon'ble High Court, Competent Authority under TNPID Act, Administrators, Special Officers, Government appointed Chairmen etc.,

ACHIEVEMENT OF EOW-I I:  In the year 2009 upto October, an amount of Rs. 64.25 Crores was refunded to the depositors and in the year 2008, refund of money Rs. 172.50 Crores is the highest amount refunded so far, since the establishment of EOW-II in the year 2000. The refund position for the last five years is given below: