A senior RBI official said Kuber Mutual Benefit had collected Rs 180 crore from the public. ``We asked three Kuber companies (Kuber Mutual Benefit, Kuber Finance and Kuber Auto Finance) to stop collecting deposits a month ago. Thereafter, we issued a show-cause notice to the group following various complaints. We are considering further action against the group,'' the RBI official said.

``We detected several irregularities in the deployment of funds by Kuber companies. We're now studying the reply by the company,'' said an RBI official. Theoption before the RBI is to liquidate the three companies. Once the RBI takes a decision for liquidation, it will need to approach the court which will appoint a receiver to take over the assets of the companies. However, investors are unlikely to benefit as Kuber Mutual Benefits alone has liabilities of Rs 210 crore while its book assets amounted to Rs 211 crore.

Investors in several cities - especially Mumbai and Delhi - who put money in various Kuber companies have now realised that the group's offices have downed shutters. ``I have been after the company to get back my Rs 20,000 for the last three months, but there has not been any response,'' said an investor, Bharat Shah, blaming the RBI and the government for lax monitoring of finance companies.

The problems in the Kuber group have raised eyebrows in financial circles. After the CRB Capital Markets scam and closure of many finance companies like Global Finance, DSJ Finance, Prudential, Helios Finance, Hoffland Finance and JVG Finance in the lasttwo years, the RBI and the government had tightened the guidelines. ``Even after this, it is surprising that one more finance company has gone bust. This shows lack of proper monitoring and regulation by the Reserve Bank of India and the Department of Company Affairs,'' said an investor who lost money in Kuber.

``Many companies like Kuber have been diverting to other non-productive areas like real estate, stock markets and illegal lending... but nobody seems to be bothered,'' said a banker. Kuber Mutual Benefit had made illegal advances without obtaining collaterals. When the RBI detected this, it asked DCA to deregister the company as a nidhi firm.

Kuber has been mobilising money from investors through several deposit schemes. The group started defaulting on repayment to depositors after realising that several hundred crore of rupees sunk in real estate could not be recouped. Default on repayment has continued for last six months. While some of the Kuber companies were regulated by the RBI, theDepartment of Company Affairs was regulating mutual benefit companies. With different regulators monitoring the group's operations, there was no proper and centralised supervision.

Last year, a Delhi-based consumer organisation had filed a petition against Kuber and other finance companies accusing them of siphoning of public money. While the Delhi High Court had ordered a special audit by the Reserve Bank of India into Kuber's affairs, the company had issued advertisements in leading newspapers saying everything is all right with the company. However, the RBI failed to detect any lapses in the audit.

Meanwhile, P K Sharma, one of the promoters of the group, told our correspondent in Delhi that the income-tax department was holding back Rs 26 crore of the group company which he was expecting to get back after May 8, the date of final hearing of the case. Sharma also indicated that the company was trying to sell its real estate assets, even at the prevailing low market rate, for the same purpose. Referringto reports in the media that he and his co-promoter G M Sharma are absconding, P K Sharma said "I have no intention of ditching the investors. I am trying my level best to return the money."