Halal Fayidah Co-operative Society denies investment scam allegations
The Halal Fayidah Co-operative Society in Kannur rejects claims of a scam or collapse. It says no deposits were accepted, only share capital, and that previous withdrawals and audits support its stance.
Key takeaways
- The society denies it accepted deposits and confirms share capital was used for operational goals.
- A complainant withdrew after funds were returned, following involvement of local political figures and media coverage.
- New management took charge in 2025, with a September shareholders’ meeting planned to chart the future.
What Happened
The Halal Fayidah Co-operative Society Limited, an Islamic banking initiative in Kannur, publicly denied that it collapsed or that an investment scam occurred. The society asserted that it never accepted deposits; instead, money collected from members was share capital intended to meet its objectives. A Mayyil resident, K.P. Nasser, had lodged a complaint alleging that money invested had not been returned. The complaint was routed to Taliparamba MLA T.K. Govindan and subsequently to Chief Minister V.D. Satheesan, which brought the allegations into public discussion. After media coverage of the issue, the society returned the funds to Nasser, who then withdrew the complaint. The MLA requested a broader inquiry into the matter, noting concerns that other shareholders felt cheated.
On August 16, the society’s president, C. Abdul Kareem, issued a statement describing the accusations of financial irregularities as baseless. He provided a timeline of the society’s formation and operations, noting that it was registered on August 25, 2017, and began activities on November 13, 2017. He emphasized that, although bylaws allowed deposits, the organization did not accept any. Share capital collected amounted to ₹17.28 lakh through 6,913 shares. Of this amount, ₹6.65 lakh was spent on facilities needed for operations, including office infrastructure, furniture, fixtures, and computer equipment. He also stated that the accounts were audited by the Cooperation department for 2017-18, 2018-19, and 2019-20, with no financial irregularities reported in those audits.
Kareem described an early project to establish a large-scale meat-processing plant, for which land was sought through KINFRA, a project report prepared, and an application for registration submitted. The project could not progress due to circumstances including the COVID-19 pandemic and floods. He noted that under the bylaws, shareholders could withdraw their share amounts after a three-year period, and that such withdrawals had been made when requests were submitted. A new management committee assumed charge on March 6, 2025, and a shareholders’ meeting was proposed for September to discuss the organization’s future direction. Kareem asserted that Halal Fayidah would remain strong in Kannur and that efforts would be made to ensure no shareholder incurred a loss, while urging members not to be swayed by what he called misleading propaganda about a collapse or fraud.
The publication of the statement occurred on August 17, 2026, with the site timestamp indicating 08:12 pm IST.
Why It Matters
The dispute highlights concerns about transparency and governance in a community-focused financial initiative. The society’s insistence that no deposits were accepted and that share capital was the sole financial instrument, coupled with past audit reports showing no irregularities, frames the issue around how cooperative entities communicate with members and respond to allegations. The timing of a new management committee and a planned shareholders’ meeting suggest efforts to stabilize operations and clarify the organization’s future course for stakeholders in Kannur.
Background
Halal Fayidah Co-operative Society was established in 2017 as an Islamic banking initiative under political leadership associated with the CPI(M). It reported collecting share capital from members and planned a meat-processing plant project that was not advanced due to pandemic-related and natural-disaster-related constraints. The organization’s audit history covers three consecutive financial years, reportedly without irregularities being flagged by the Cooperation department.
Key Facts
- Society registered on August 25, 2017; operations began on November 13, 2017.
- Total share capital collected: ₹17.28 lakh; number of shares: 6,913.
- Actual expenditure on facilities: ₹6.65 lakh.
- Audits conducted for 2017-18, 2018-19, 2019-20 with no reported irregularities.
- Complaint regarding non-return of funds was filed by K.P. Nasser and later withdrawn after funds were returned.
- A new management committee took charge on March 6, 2025.
- A shareholders’ meeting was proposed for September to decide the organization’s future direction.
- Projects included a plan for a large-scale meat-processing plant that could not progress due to COVID-19 and floods.
- Bylaws allowed deposits, but the society claims none were accepted.
What Happens Next
The society intends to revive its activities under a new management framework and hold a shareholders’ meeting to determine the path forward. It aims to reassure members that no shareholder will incur losses and to counter what it calls misleading propaganda about a collapse or fraud. The actions planned for September will likely address governance, financial transparency, and ongoing revival efforts.
Sources reviewed
Project Chintan independently synthesized and analyzed information cross-checked across the sources listed above.
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