Goodwin Jewellers case highlights risk of gold investments

By

Isabelle Crossley

Published
Nov 5, 2019

The ongoing police case involving Goodwin Jewellers has highlighted the risk consumers can face when investing in gold schemes for gold and gold jewellery in India, a legal expert has said.

As hundreds of consumers await news concerning the ongoing police case into Goodwin Jewellers, which recently shut all of its Maharashtra shops with no notice leaving investors in the lurch, the legality of gold schemes has been called into question, TNN reported. Investors in jewellers’ gold schemes currently have no legal protection if the business faces liquidation, which is currently the case for Goodwin Jewellers customers. 

A legal professional told TNN that, according to the Companies Act 2013, public limited companies can accept deposits as long as they do not exceed 25% of the net worth of the firm and limit returns at 12.5%. Moreover,  if total deposits exceed Rs 100 crore ($15 million), the business must get approval from the Securities and Exchange Board of India, although not all do.

Other jewellers that experienced financial issues causing investors to loose money include Bengaluru’s IMA Jewellery, Chennai’s Ruby Jewellery and Nathella Sampathu Chetty, and Kerala’s Thunchath Jewellers and Avathar Jewellers. The police investigation into Goodwin Jewellers and its owners A M Sudheeshkumar and A M Sunilkumar is ongoing and the brothers recently annonuced that investors will most probably have to wait for four years to see their funds returned.