West Bengal has a history of financial scams, specially those related to chit funds. In the 1970s, there was a Sanchayita investment scam where investors lost many crores. That scam led for creation of Prize Chits and Money Circulation Schemes (Banning) Act of 1978. In the early 2000s, the group of companies – Saradha Group, which unfortunately were named after Sarada Devi, wife of Ramakrishna Paramhans, created a Ponzi scheme that looted the investors to the tune of ₹200 to 300 billion (US$4–6 billion)! 1.7 million depositors were duped before the whole scheme crashed in April 2013.
When the Bengal state government was not doing anything except lip service, Supreme Court of India transferred the investigation of Saradha Scam and other Ponzi schemes to Central Bureau of Investigation (CBI). Many prominent people were arrested – Trinamool Congress MPs Kunal Ghosh and Srinjoy Bose, former West Bengal Director General of Police Rajat Majumdar, a top football club official Debabrata Sarkar, Sports and Transport minister of the Trinamool Congress government – Madan Mitra. The links of Trinamool Congress to the scam were clearly established.
The Saradha Group was founded by its Chairman and Managing Director, Sudipto Sen who used to be a Naxalite named Shankaraditya Sen, working closely with Charu Mazumdar and even arrested in 1971-72. He disappeared and got plastic surgery done and resurfaced at Sudipto Sen.and became a land shark – working on (euphemistically termed) “land development projects”. He was finally arrested from Kashmir where he was hiding.
He created a land bank which became the nucleus of the Saradha scam. The schemes they ran promised astronomical returns and were sold by local agents in the rural communities. These agents were given commissions to the tune of 25-40% and several lucrative gifts to create a pyramid structure.
The group started off by issuing secured debentures and redeemable preferential bonds but when SEBI challenged it in 2009, it created a web of companies with cross holdings and initiated a host of schemes to defraud people via things like tourism packages, forward travel and hotel booking timeshare credit transfer, real estate, infrastructure finance, and motorcycle manufacturing! And chit fund.
It was in 2011 that SEBI had warned the State Government of West Bengal about the chit fund scams. And, the group changed its ways by buying and selling large shareholdings of various listed companies then embezzled these sale proceeds via several hidden accounts. Accounts which have yet not been identified until 2014! And it did not stop there. Saradha group laundered (Hawala) its money to Dubai, Singapore and South Africa.
In 2012, SEBI classified the activities of Saradha group as collective investment schemes as opposed to chit funds and demanded that the group stop its activities right away until permission from SEBI. The group did not comply and finally crashed in April 2013.
Many major personalities like actress and Trinamool MP Satabdi Roy, actor and Trinamool MP Mithun Chakraborty, actress and director Aparna Sen were used to build the brand.
When CBI wanted to probe the case, Mamata Bannerjee did not allow it to happen calling it unconstitutional!
Now, the story has taken another twist, when CBI found that the scamsters of chit fund companies had been buying paintings by Mamata Bannerjee – ostensibly for political patronage – for huge amounts of money!
Central Bureau of Investigation sleuths have seized around 20 or more paintings by Bengal chief minister Mamata Banerjee which some chit fund company owners under CBI scanner had bought. CBI insiders investigating the chit fund scam alleged that some of the paintings were bought for prices ranging from Rs 3 lakh to Rs 10 lakh or even more.
The Trinamool Congress are obviously trying to show as if everything was harmless and innocent, when it really was anything but.
The CBI is on the ball and the Trinamool party is obviously trying to deflect the whole investigation in political terms since the links of chit fund scams go all the way up to Mamata Bannerjee!
And, that is chilling – that the corrupt and criminal political leaders in India’s states can not just defraud the citizens of millions and billions of dollars and thwart the intelligence agencies from even investigating them simply by calling it a political vendetta. If they are so clean, let the CBI investigate them.