Tuesday, August 16th, 2022 15:34:19

Business Of Cheating Funds

Updated: May 11, 2013 12:47 pm

West Bengal is now again in the news for wrong reason. This time it is chit fund fiasco, in which the association of some senior ministers and leaders of the ruling party are found with now Saradha Group. Meanwhile, the main accused Sudipta Sen was arrested from Sonmarg in Jammu and Kashmir along with his associates after a run for nearly two weeks.

But the state is restless with the fraud involving several people. The bankruptcy came to light when the company first closed its media wing, and subsequently closed four television channels and five newspapers and a magazine run by the group a week ago, inciting employees to file FIRs. Meanwhile, the investment agents of the group are spending sleepless nights fearing backlash from the investors, while the latter witnessing their world collapsing in a few moments. A couple of suicide cases have already been reported from the state while protests are on.

The man in question, the owner of the group Sudipta Sen, is mysterious person. No one knows how did he grow into a millionaire and a media baron in the state in no time from mere a real estate broker. People identify him as Shankar Sen, who fled his home with family after he was found involved in a sex trade case. Some says he had done plastic surgery to hide his identity and also changed his name. He has two wives with separate family arrangements. His working hours in office is from 9pm to 4am early next morning, during which time he reportedly takes important decisions for over 300 registered companies under the banner of Saradha. The more will be known as he has been arrested and many things are expected to come out.

The political blame game has started and there is every possible chance of this emerging as a major embarrassment to Chief Minister Mamata Banerjee, as the support base of Mamata Banerjee and her party lies in the hinterland, from where a large number of people have invested in chit fund. Protests by lakhs of anguished investors facing the spectre of losing their savings, have risen to a crescendo.

Rattled, Trinamool is pointing the finger at the Centre and previous Left Front government for preparing the ground for the scam. According to Chief Minister Mamata Banerjee, the Saradha had started business in 2006 when the Left Front was in power and hence all the agents of the company were appointed by the former rulers. The Chief Minister did not stop here. She told those who had gone bankrupt, “What’s gone is gone. Be patient. We are making a law for you.” The Opposition slammed Banerjee for such casual remarks. Leader of the Opposition Surjya Kanta Mishra said, “The CM’s message is clear. She said what’s gone that’s gone and if there is more to be stolen, steal that as well.”

Blame game is on from all fronts, however, there is no escaping the widespread perception among the duped depositors that they were confident of returns on their money due to the company’s proximity to the State government.

Earlier scams

The scam is reminiscent of the closure of the Sanchayita Investments in the early 1980s when investors were duped of their savings in the company. After investigations initiated by the Left Front government in power then, a company boss committed suicide following his arrest. It is although yet to be proved, it is said that Sanchayita Investments was started by the father of Sudipta Sen, Bhudev Sen.

What makes the collapse of the Saradha finance company different is the fact that it was a part of a bigger business empire that included several media organisations that have also recently been closed down. It is only too well known that they all leaned towards the Trinamool Congress.


By Atanu Bhattacharya

■             In December 2011, the RBI had issued advertisements against Sunmarg Welfare Society and Amazon Capital, clarifying that it does not give any guarantee to the investment options being floated by these two companies.

■             Sunmarg Welfare Society, a company based out of Diamond Harbour, South 24 Parganas, claimed that it is an NGO approved by the ministry of corporate affairs and the RBI. Although the regulator has barred companies like Peerless and Sahara from collecting advances, more than a hundred chit-fund companies, most of whom have consciously left Kolkata out of bounds, have targeted the border districts of the state.

■             According to RBI sources, the worst affected districts are 24 Parganas (north & south), Hooghly, Malda and Cooch Behar. To bypass the RBI radar, these companies have also started issuing debentures, preferential shares and bonds, instead of collecting deposits.

■             Left, which ruled Bengal for 33 years before it was vanquished in last year’s Assembly elections, had allowed dubious chit funds to flourish since 1980s in West Bengal. Senior CPM leader Sitaram Yechury said, “The Left government in West Bengal had enacted a law to protect small investors, but the bill didn’t get presidential assent. The bill was revised in 2009 by the Left government.”

■             The FIR lodged by the commercial tax officer on December 13, 1980, revealed Sanchayita used to make extremely high-risk investments that could help them pay such rates of interest. Investigation showed that instead of their names being registered, the agents had been assigned code numbers and that they had acquired huge properties at various places and also started new business ventures and having high up contacts to get political shelter.

Political links

Not only was the party’s Rajya Sabha MP Kunal Ghosh, the group media CEO of Saradha, another of its MP Satabdi Roy, was the group’s brand ambassador.

Furthermore, the State’s Minister for Sports Madan Mitra, considered close to Mamata Banerjee had shared the dais with Sudipta Sen, Chairman and Managing Director of the Group at a company event.

Although Kunal Ghosh has denied his active involvement saying he was just a paid employee, who was looking after his media wing. Satabdi, too, said, “I hardly met Sudipta Sen, they approached me and I did it taking my professional remuneration”.

Meanwhile, Minister Madan Mitra said, “We never endorsed Saradha group, we never approached people to invest in the company”

But the political fallout of the scam could be massive. It could surely impact the prospects of the Trinamool Congress in the upcoming panchayat elections, as a large population of those affected by the scam belong to rural areas. Already, the Trinamool has been accused by the Left parties and the Congress of working to pushing back the poll schedule, fearing uncertain of its prospects due to feuds within the party likely to be intensified in future.

The Central government has been time and again reminding the state government for taking strict against the chit fund companies in the state. But what stopped the government no one knows. [Details of Question Answer Session in Lok Sabha over the issue on 14th March 2013 is attached]

Meanwhile, Chief Minister Mamata Banerjee has tried to pacify people by saying, “Law will take its own course.” The question, however, is how many more suicides of agents or investors will get government act against the chit fund companies.

By Joydeep dasgupta from Kolkata




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