School faces parents’ rap for charging ‘book money’

OLPS charging Rs 10,000 for books provided free of cost by the government and is not even giving receipts in return, claim parents
A group of parents, whose children study at the Our Lady of Perpetual Succour High School (OLPS), has alleged that the Chembur-based school has asked its students to pay Rs 10,000 as “book money”.

They said the money was being accepted only in cash and the school was issuing no receipts in return. The parents have now approached an NGO, Forum for Fairness in Education, regarding the matter.

The complaint registered with the NGO stated that the school has made it mandatory for students to buy course books and uniforms from the school, that too at a hefty price.

The price of books varies from Rs 9,400-10,700 depending on the class. In addition, the school is not providing parents with any receipts of these purchases.

A circular issued by the school on April 5, a copy of which is with Mirror, said the books will be given to students on the day of declaration of results.

After mentioning the amount to be paid, it further directed parents to bring the exact change and to write the ward’s roll number, standard and division, in pencil, on every Rs 1,000 and Rs 500 note. The cost of the uniform has also been specified.

“This is not the first time that the school is charging hefty sums of money. Last year also they charged every student Rs 6,000 and did not provide with any receipts. There are many poor students studying in the school. Some parents have two to three kids studying in the same school. Another problem is that the school is not even providing with the break up of the amount,” said a parent.

The parents are also contending that since the school is aided, textbooks for secondary section are provided by the government for free.

When contacted, school manager Paul Julius said, “The Parents-Teachers Association (PTA) was consulted and everybody had agreed on this decision. We are not forcing anyone to buy things from us. If the parents had a problem, they should have approached the PTA or the management to solve the issue, instead of directly approaching the NGO.”

Jayant Jain, president of the Forum for Fairness in Education, said, “We had filed a PIL in high court in 2004. The court had then passed an order that no school will sell books, uniforms, stationery items, etc. in the premises and that the schools won’t force parents to purchase these from a specific shop. The government had issued GR to this effect. But most schools, including aided ones, are openly selling books and collecting double the market price. We have advised the parents to file an FIR.”
Courtesy:
Mumbai Mirror Bureau mirrorfeedback@timesgroup.com
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=MIRRORNEW&BaseHref=MMIR/2013/04/25&PageLabel=5&EntityId=Ar00500&ViewMode=HTML

Irrigation scam: HC nod for CBI probe

NAGPUR: In a major jolt to the Maharashtra government, the Nagpur bench of the Bombay high court has cleared the way for hearing petitions that have demanded a CBI or court-monitored probe into the mega irrigation scam in the state.

A division bench on Wednesday rejected the preliminary objections raised by the Vidarbha Irrigation Development Corporation (VIDC) questioning the maintainability of two public interest litigations for seeking a CBI probe into the reported financial irregularities and corruption in irrigation projects across Vidarbha without making a representation to the state government or filing a criminal complaint case.

The Comptroller and Auditor General (CAG) has slammed the VIDC for large-scale financial impropriety in executing these projects.

Citing the CAG report, Jan Manch in its PIL pointed out that within seven months in 2009, the cost of 38 VIDC projects escalated by Rs20,050.06 crore and that 30 of these projects had got approvals in four days. In its affidavit, the VIDC admitted to cost escalations, but pegged the figure at Rs17,701 crore.

Another petition filed by social workers Mohan Karemore, Amit Khot and Bharti Dabhadkar has questioned the VIDC’s role in unjustified cost escalations.

In December 2012, the government announced that a special investigation team headed by former secretary Madhav Chitale would look into the scam. It is expected to submit its report in six months.
Courtesy:
25 Apr 2013
Hindustan Times (Mumbai)
Pradip Kumar Maitra pradipmaitra@hindustantimes.com
http://paper.hindustantimes.com/epaper/viewer.aspx

Another Adarsh? Worli towers built without green clearance

MUMBAI: The two housing societies in Worli proposed, built and occupied by state politicians were constructed without mandatory environmental clearances, just like the controversial Adarsh society.

Both the 32-storey Shubhada and 14-storey Sukhada fall in Coastal Regulation Zone (CRZ) II as they are located within 500 metres of the high tide line. This made it mandatory for the societies to get clearance from the Maharashtra Coastal Management Zone Authority (MCZMA).

Documents with HT show that after the Brihanmumbai Municipal Corporation rejected the proposal to construct these societies in 1997 for lack of a no- objection certificate (NOC) from the Union ministry of environment and forests (MoEF), the societies approached the state’s urban development department instead of going to MCZMA. Subsequently, in 2003-04, the UDD, which is headed by the chief minister, issued an NOC. This despite a January 2002 MoEF order that all proposals for construction in CRZ areas in Mumbai had to be cleared only by the MCZMA.

State environment secretary Valsa Nair Singh on Wednesday refused to comment on the matter without examining the concerned papers.

“We did not need any CRZ clearance as there were already structures that existed between the sea and our plot, so we did not obtain such a nod,” said Ranjit Deshmukh, chairman of Shubhada and former state Congress chief.

“Despite not requiring CRZ nod, we approached the UDD and got an approval,” said MS Belekar, the societies’ architect

Activist Amit Maru, who exposed the irregularities in the construction of the two highprofile societies, said: “The BMC had made it clear that the society will need CRZ clearance However, the society conveniently went to UDD because MCZMA would never have allowed them to use so much floor space index and go so high.”

The societies house politica heavyweights such as deputy CM Ajit Pawar, former CM Ashok Chavan, state Congress chief Manikrao Thakre and BJP leader Gopinath Munde.
Courtesy:
25 Apr 2013
Hindustan Times (Mumbai)
Kunal Purohit kunal.purohit@hindustantimes.com
http://paper.hindustantimes.com/epaper/viewer.aspx

बँक खात्याचा तपशील चोरणारा ‘व्हायरस’ आलाय : Win32/Ramnit पासून सावध

इंटरनेटधारकांनो सावधान : सायबर सिक्युरिटी सेलचा इशारा
नवी दिल्ली, दि. २४ (वृत्तसंस्था) - देशात इंटरनेट बँकिंगने व्यवहार करणार्‍या ग्राहकांच्या संख्येत लक्षणीय वाढ झाली असतानाच त्यांच्या बँक खात्यातील तपशिलासह पासवर्डचीही उचलेगिरी करणारा खतरनाक व्हायरस आला आहे. त्या संगणकीय व्हायरसपासून सावध राहावे असा इशारा कॉम्प्युटर इमर्जन्सी रिस्पॉन्स टीम-इंडिया या सायबर सिक्युरिटी संस्थेने दिला आहे.

संगणकीय माहितीची चतुरपणे चोरी करणार्‍या नव्या व्हायरसचे नाव ‘Win32/Ramnit’ असे आहे. रॅमनीट व्हायरसचा प्रादुर्भाव EXE, dll अथवा html या प्रकारच्या संगणकीय फाईल्स सेवा अथवा डाऊनलोड करताना होऊ शकतो.

रॅमनीटची कार्यपद्धतीरॅमनीट हा व्हायरस अतिशय घातक असून तो ऍण्टीव्हायरस सिस्टिम सुरू केल्यावर लपून राहण्यात सक्षम आहे. एखादी अनपेक्षित, अनोळखी फाईल अथवा वेबसाईट उघडल्यावर हा व्हायरस संगणकाच्या गुप्त माहितीवरच ताबा मिळवतो. बँक खात्याचा तपशील, पासवर्डची चोरी करीत तो संगणकीय फाईल्सची ब्राऊजर सेटिंगही बिघडवून टाकतो. याशिवाय महत्त्वाच्या संगणकीय फाईल्स चोरून डाऊनलोड करण्याची क्षमता या व्हायरसमध्ये आहे.

रॅमनीटची कार्यपद्धतीरॅमनीट हा व्हायरस अतिशय घातक असून तो ऍण्टीव्हायरस सिस्टिम सुरू केल्यावर लपून राहण्यात सक्षम आहे. एखादी अनपेक्षित, अनोळखी फाईल अथवा वेबसाईट उघडल्यावर हा व्हायरस संगणकाच्या गुप्त माहितीवरच ताबा मिळवतो. बँक खात्याचा तपशील, पासवर्डची चोरी करीत तो संगणकीय फाईल्सची ब्राऊजर सेटिंगही बिघडवून टाकतो. याशिवाय महत्त्वाच्या संगणकीय फाईल्स चोरून डाऊनलोड करण्याची क्षमता या व्हायरसमध्ये आहे.
http://www.saamana.com/2013/April/25/Link/Main1.htm

Agents bear brunt of Saradha collapse

Depositors of Saradha Group are making off with whatever they can lay their hands on in agents’ homes

Sonarpur, South 24 Parganas (West Bengal): He had spurned the offer of a Rs.50,000-a-month job at the Saradha Group to keep working as one of its agents. Today, after one of eastern India’s biggest deposit-taking companies collapsed, Debasish Banerjee is counting the losses he inflicted on depositors—Rs.60 crore.

Now in his mid-50s, Banerjee was one of the blue-eyed boys of Sudipta Sen, the fugitive chairman and managing director of the Saradha Group, and presided over a chain of 10,000 sub-agents spread over eight districts in West Bengal.

Banerjee cut his teeth in door-to-door deposit collection in the early 1980s as an agent of Peerless General Finance and Investment Co. Ltd—a residuary non-banking company, which pioneered in collecting small savings. Though it didn’t ever default on repayments, Reserve Bank of India (RBI) forced Peerless to stop taking deposits in 2005-2006. This spawned the growth of unregulated deposit-taking companies in West Bengal and other eastern Indian states.

Exploiting the strength of Peerless’s impeccable repayment track record, its redundant field agents helped found new firms that went after people’s savings, mostly in rural areas.

Among those that Banerjee recruited to collect deposits for the Saradha Group was Ayan Naiyya—an unemployed youth of 24. Naiyya says he mobilized Rs.60 lakh from one Nischindapur village in South 24-Parganas district, where he lives.

There are around 5,000 unemployed people in Nischindapur and other adjoining villages. At least 300 of them became agents of the Saradha Group, according to Naiyya, who used to earn around Rs.8,000 a month as commission. At least half of the agents from Nischindapur are now on the run for fear of being lynched.

Not just the unemployed youth, Banerjee managed to rope in a large number of housewives to work for the Saradha Group. One such was Rupa Naskar, who says she has been driven out of her home by her in-laws because she had collected Rs.1.5 lakh from neighbours for the Saradha Group. They vandalized her home on hearing last week that the group had gone bust and there was little hope of recovering their deposits. She sold her jewellery to repay them from her own kitty, but couldn’t.

Naskar says she started working as an agent of the Saradha Group to augment her family income.

Her husband works as a contract labour, and the Rs.3,000-4,000 she earned every month from commissions “meant a lot for us”.

When the going was good, Sraboni Ghosh, a lowly district official in South 24-Parganas district, bought herself a scooter with her monthly commission of Rs. 20,000 from the Saradha Group, but has had to flee her home. The scooter, she says, must have been taken by her depositors.

In South 24-Parganas district, depositors have not only vandalized the Saradha Group’s offices, they are making off with whatever they can lay their hands on in agents’ homes, Banerjee says.

“We have a full-blown law and order situation,” said a key government official being consulted on the crisis. He did not wish to be named.

Returns promised by the Saradha Group and other deposit-taking firms were higher than highstreet banks and the government’s small savings schemes. They used to offer 15-18% annualized returns on short-term deposits, but for the people they targeted, that little bit more made a lot of difference.

After retiring from Garden Reach Shipbuilders and Engineers Ltd—a public sector firm—Sankar Das deposited Rs.5 lakh in a monthly income scheme run by the Saradha Group.

He had initially deposited his retirement benefits with a bank and was receiving around Rs.6,000 in interest, he says. The Saradha Group’s scheme promised him Rs.1,500 more per month. He fell for it because he needs to support his son, who, working at a laundry, doesn’t earn enough to support his wife and children.

A large number of agents, too, have lost their own savings.

Munnat Ali Naskar, who raised Rs.28 lakh for the Saradha Group, had deposited his family’s own savings of Rs.4 lakh. His savings gone, he has even been hounded out of his home.

“Poor people will explore all possible ways to increase their income,” says Amiya Bagchi, a former professor and an economist, adding that the poor are “gullible” and easily get carried away by promises of even marginally higher returns.

“As for the women, they are worse off,” Bagchi says. “It is hardly surprising that they look for ways to make the extra buck because they are often abandoned by their husbands and have to fend for themselves.”

Because the Union government stopped paying commission to agents who collected deposits for state-run small savings schemes such as the Public Provident Fund, they turned to private firms, said Asim Dasgupta, West Bengal’s former finance minister and an economist.

Firms such as the Saradha Group paid huge commissions, going up to 30% of deposits collected. This was shared across the chain with the person at the bottom of the layered marketing chain receiving around 10%.

The Saradha Group’s Sen said in a recent undated letter to his so-called marketing members, or people such as Sonarpur’s Banerjee, that his business collapsed because of the unviable commission structure and the unbridled expansion of the sales force.

The group, it appears, collapsed under its own weight, having spread across West Bengal and other neighbouring states at a breakneck speed.

And it started from a district where its penetration was almost unrivalled—South 24 Parganas, says Banerjee. “It all started late last year when cheques bounced and it became increasingly difficult to convince people to give more money,” he recalls.
Courtesy:
Romita Datta Mail Me
First Published: Sun, Apr 21 2013. 11 51 PM IST
Updated: Mon, Apr 22 2013. 04 29 PM IST
First Published: Sun, Apr 21 2013. 11 51 PM IST
http://www.livemint.com/Industry/fsBj2Ukx72pKVJzbm3bMmJ/Agents-bear-brunt-of-Saradha-collapse.html

Promoter at large, no trace of depositors’ money on Saradha books

Group took deposits in cash, firms that issued certificates of deposits don’t acknowledge them as liabilities

Kolkata: Over the past few days, Midland Park in Salt Lake sector V, a six-storey building in the heart of Kolkata’s information technology hub, has been thronged by Saradha Group’s commission agents, depositors and employees.

When they turned up at the group’s corporate office on Thursday, hoping to recover their dues—matured deposits or unpaid salaries—from what used to be one of eastern India’s biggest public deposit-taking companies, they found it vandalized.

The building was ransacked on Wednesday night, according to the policemen now guarding the office. “There’s no one here,” one of them told an elderly lady, who broke down on hearing that the executives hadn’t been seen at Midland Park since the end of last week.

A few hours later, chief minister Mamata Banerjee said at the state secretariat, Writers’ Buildings, that the police were trying to get hold of Sudipta Sen, the group’s 54-year-old chairman and managing director, who, according to the administration, is absconding.
“He is believed to be hiding in the north (of India),” Banerjee said, while leaving the state secretariat.

Mint reported in its Wednesday’s edition that Banerjee had ordered Sen’s arrest.

Very little is known about Sen’s family, education or roots.

Not only a “smooth talker”, Sen, who is also the promoter of the closely held group, was “quite a rabble-rouser”, said a former employee of the group, recalling his January 2011 address to at least 12,000 agents at Kolkata’s Netaji Indoor Stadium.

He otherwise kept a low profile in office, and shared a desk with his executive assistant, this person added, asking not to be named.

Sen spoke Bengali with an Assamese accent, according to most accounts, although he mostly spoke English at work.

None of the directors of the Saradha Group could be contacted for comment.

Kunal Ghosh, a Trinamool Congress Rajya Sabha member, was the editor and chief execu tive officer (CEO) of the group’s media venture till about a month ago when he quit. He couldn’t be reached for comment.

Though key Trinamool Congress leaders on Wednesday assured the Saradha Group’s agents that the state government will do everything possible to help people realize their dues, it may not be possible to even determine how much money it ever raised from the public.

The reason: deposits were taken in cash, and the companies that issued certificates of deposits do not acknowledge them as liabilities in their books—a departure from the usual practice of treating public deposits as debt.

The only exception was perhaps Saradha Realty India Ltd, which two years ago, admitted in its books to have received public deposits of Rs.156.74 crore, according to the latest available filings with the Registrar of Companies (RoC).

In line with standard accounting practices, this amount was shown in the firm’s balance sheet for 2010-11 as advances from customers.

The group had at least 100 companies in its fold, show RoC filings. Among those that actively mobilized deposits, according to agents, were Saradha Garden Resort and Hotel Pvt. Ltd, Saradha Construction Co. Pvt. Ltd, Saradha Abasan Pvt. Ltd and Saradha Agro Development Ltd.

Saradha Garden Resort, said a corporate brochure of the group, ran at least three resorts in upper Assam and north Bengal, but its balance sheet for 2011-12 shows the company had no revenue from operations and total liabilities of Rs.8.14 crore, which included long-term loans of Rs.7.4 crore from within the group.

Similarly, Saradha Abasan had no revenue from operations in 2011-12 and current liabilities of Rs.500 on account of unpaid audit fees. This firm, according to the brochure, was developing affordable homes in rural areas in West Bengal and Nagaland.

These two firms had a small paid-up capital of around Rs.1 lakh each and almost no tangible assets.

Only Saradha Agro Development appears to have some operating business—in fiscal 2012, it recorded Rs.8.94 crore in revenue and made a net profit of Rs.17.87 lakh.

This firm, which claims to be selling packaged food products, had bank loans of Rs.11.77 lakh and loans from within the group of Rs.9.82 crore at the end of March 2012. Its total assets were valued at Rs.1.12 crore at cost.

In West Bengal and other north-eastern states, deposit-taking companies typically claim to invest in agriculture, real estate and hotel projects.

As the balance sheets of these companies do not reflect public deposits, it is a “distinct possibility” that the Saradha Group would disown them, calling the receipts issued to depositors as forgeries, according to a leading chartered accountant in Kolkata.

“I am not sure whether he (Sen) can get away with it legally, but clearly it is almost impossible to determine how much he has siphoned off,” he added, asking not to be named.

Several agents confirmed that deposits were only taken in cash.

Meanwhile, Siva Ventures Llc, a Washington-based private equity (PE) investment vehicle of Chennai-based serial investor C. Sivasankaran, is planning to take legal action against the Saradha Group to recover dues of Rs.13-14 crore from its sale of a clutch of television companies two years ago.

In 2010, Sen approached Rathikant Basu, who at that time ran the Tara channels as chairman and CEO of Broadcast Worldwide Ltd, to acquire his and Siva Ventures’ combined 75% stake in the firm.

Though shares were transferred and Sen took over the channels in March 2011, he did not fully pay for them, according to a person familiar with the deal, who did not want to be identified.

Sen defaulted on the staggered payment arrangement that was agreed upon, he said.

A spokesperson for Siva Ventures and Basu refused to comment on the deal.

The Saradha Group had mortgaged a property in West Bengal with Siva Ventures as security, said the person cited above, adding that the US-based PE firm was taking legal steps to liquidate it to recover the dues.
Courtesy:
Manish Basu |  Romita Datta
First Published: Thu, Apr 18 2013. 11 39 PM IST
Updated: Mon, Apr 22 2013. 04 27 PM IST
http://www.livemint.com/Companies/XCytQneVQGArEndRXYAzVN/Promoter-at-large-no-trace-of-depositors-money-on-Saradha.html

BANKER’S TRUST REALTIME : Four lessons from Sebi-Sahara spat

What should Sebi do to get to the bottom of Sahara case?
India’s apex court has once again expressed its unhappiness with Subrata Roy’s Sahara India Pariwar, a Lucknow-based conglomerate that has at least 4,100 establishments in its fold and Rs.1.18 trillion in assets spread across real estate, infrastructure, media, hospitality, sports and finance. “You are manipulating courts,” a Supreme Court bench, consisting of judges K.S. Radhakrishnan and J.S. Khehar, said on Monday in reference to the group approaching different forums for relief in a legal battle with the stock market regulator. The bench wanted to know why Sahara was refunding money directly to investors and not routing it through the Securities and Exchange Board of India (Sebi), as has been directed by the court.

The group claims that Sahara India Real Estate Corp. Ltd (SIRECL) and Sahara Housing Investment Corp. Ltd (SHICL) have already paid back some Rs.19,000 crore to investors who purchased securities sold by the two firms. Instead of providing a list of people who have received their refunds, the group has been filing appeals in various courts. Sebi wants a few directors of these two companies, including Roy, detained for delaying the refunds.

In August 2012, Radhakrishnan and Khehar asked Sahara to pay back Rs.24,000 crore and directed a retired Supreme Court judge, B.N. Agarwal, to oversee the process. Since then, Sebi has been struggling to get the investors’ money back.

What should it do to get to the bottom of the case which, according to Sebi counsel Arvind Datar, keeps getting “curiouser and curiouser”?

First, it can ask Sahara to provide the list of the top 1% or 5% of investors in the bonds sold by SIRECL and SHICL. Typically, the top 1-5% “creamy layer” of investors account for 20-25% of the money invested. This will make life easier for Sebi and also Sahara as it won’t have to send truckloads of documents to the regulator.

Second, Sebi can also look at the concentration of the investor base. If it can locate five geographical pockets, it would become easier to get a fix on the investors as Nandan Nilekani’s Aadhaar unique identity number project can do the rest of the job.

Finally, Sebi could ask Roy from which banks he withdrew the money to pay investors. He may have been paying cash but certainly he cannot keep Rs.19,000 crore in gunny bags at home or in the Sahara offices. In other words, had he indeed paid Rs.19,000 crore to the bond investors, he would have withdrawn that money from the banking system.

Sebi has been following the directives of the Supreme Court diligently but it lacks the acumen to deal with Roy.

How could Roy find himself in such a situation? The Sahara chief refused to give information to Sebi and thought he could get away with it, but now the apex court is seeking the same details from him. Had he provided the information to Sebi, he would not have found himself in such a mess.

It may or may not be the end game for Roy but many lessons can be learnt from the Sebi-Sahara spat.

First, it’s a vindication of the independence of the judiciary. In this case, justice may have been delayed but definitely not denied. The Supreme Court has demonstrated that politicians cannot shield a businessman for ever.

Second, it’s a lesson for the Indian financial system on its loopholes and how any smart entrepreneur can use regulatory arbitraging to his advantage.

Third, if indeed the two Sahara group firms had 30 million investors in their bonds, the Indian financial system can learn lessons in financial inclusion from Roy. The total number of demat accounts in India is about 20 million.

Finally, if Sahara fails to furnish the correct list of investors, the money for which there are no takers will flow into the government’s consolidated fund for investor education. That will deal a blow to Roy’s business model.

Note: Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s disputes with Sebi. Mint is contesting the case.

Banker’s Trust Realtime is a frequent blog by Tamal Bandyopadhyay, who writes a popular weekly column Banker’s Trust.
Courtesy:
Tamal Bandyopadhyay
First Published: Tue, Apr 23 2013. 01 34 PM IST
Updated: Tue, Apr 23 2013. 11 04 PM IST
http://www.livemint.com/Opinion/XYjUISOXNEpopbydhzSOpN/BANKERS-TRUST-REALTIME--Four-lessons-from-SebiSahara-spat.html

CBI arrests 5 bigwigs for SIFL defence scam

The CBI Kochi unit has arrested five persons, including a senior defence official  in connection with issuing tender for supply of battle tank components to Steel Industries Forging Limited (SIFL), Thrissur.

V K Pande, general manager of the Defence Ordnance Factory Medak, was arrested on Wednesday after interrogation. Earlier in the day the CBI arrested T Muralidhar Bhagavat, managing director, AMW-MGM Forgings Pvt Ltd, Mysore, Mugilan K R, deputy general manager - marketing, AMW-MGM Forgings, and two suspended officials of SIFL - managing director S Shanavas and marketing manager Valsan.

They were arrested after being called to the CBI office as part of the inquiry. They will be produced before the CBI Special court here on Thursday, officials said. The officials from SIFL and AMW-MGM quoted a higher amount for the defence deal. Subi Mally, the woman intermediary in the deal, asked for 12 percent commission from these officials as consultation fee. Subi, earlier arrested by the CBI, is out on bail.Subi had submitted before the CBI that she had given `3 lakh to Panda for issuing tender to SIFL.

The CBI in February had conducted raid at V K Pande’s house at Medak, following which it received some vital information regarding his role in the deal.

The case was that Subi, the business woman from Mumbai, came to know about the tender submitted by SIFL for supply of road wheel arms, a component in artillery tank, to the Ordnance Factory, Medak.

Pande, was also ‘involved’ in a similar scam while he was serving at Heavy Vehicles Factory, Avadi, in 2009.
Courtesy:
By Express News Service - KOCHI
25th April 2013 08:19 AM
http://newindianexpress.com/states/kerala/CBI-arrests-5-bigwigs-for-SIFL-defence-scam/2013/04/25/article1560143.ece

Saradha Group crisis reaches CM’s doorstep

Kolkata: The ripples from the crisis stemming from the collapse of the Saradha Group—one of eastern India’s biggest deposit-taking companies—reached the doorstep of chief minister Mamata Banerjee on Friday as 1,000-odd agents and former employees thronged her Harish Chatterjee Street home seeking help in recovering their dues.

They started turning up from across the state from around 11 in the morning. Within hours, the crowd that swamped the street was too large for the police to immediately disperse using force. Banerjee was not at home at the time.

Appreciating the political sensitivity of the crisis ahead of the forthcoming panchayat, or village council, elections in the state, “the police exercised restraint”, said a government official, asking not to be named.

Though peaceful in their agitation, they effectively laid siege to the chief minister’s home till early evening, demanding an assurance that the state government would take the responsibility of liquidating the Saradha Group’s assets and repay depositors.

“We will be lynched in our homes unless we secure a commitment from Didi,” said an agent, looking distraught, as rain clouds gathered over Kolkata and the administration deployed a large force to make sure the crowd was dispersed. He did not disclose his name.

A former Saradha Group employee from its Uluberia branch, who also joined the protests at Harish Chatterjee Street, said redemption claims had swelled to at least Rs.1,200 crore over the past few months, and the group’s total liability was far in excess of that amount. Mint couldn’t independently verify this claim. This person, too, refused to be identified.

Shortly after 6pm, as the time approached for Banerjee to return home, the police declared the assembly of people unlawful, addressing them through a megaphone, and ordered them to leave. Though the crowd thinned in fear of imminent police action, hundreds stayed put.

Eventually, the police drove them out of Harish Chatterjee Street using minimum force and loaded them into three police vans.

The stakes are high for Banerjee’s Trinamool Congress party, the leaders of which were known to be close to the Saradha Group. A bitter war of words has already started between Sudipta Sen, the fugitive chairman and managing director of the group, and Kunal Ghosh, a Rajya Sabha member of the Trinamool Congress.

Sen, in a recent, undated letter addressed to “marketing members and leaders”—people who collected money for his flagship Saradha Realty India Ltd—said his entry into the media business was his “biggest blunder”, though he had initially thought it would be the “guaranteed protector” of the “marketing members”.

The Saradha Group’s media ventures were until a few weeks ago headed by Ghosh as the editor and chief executive officer. He stepped down soon before they were shut, one by one, over the past few weeks. More than 1,000 journalists and technicians were laid off—many were not paid their salaries for several months.

The irregularities may actually stretch back for as long as one-and-a-half years, with money deducted from salaries for income tax and provident fund not having been paid to the respective authorities, according to a formal police complaint filed on Friday by a large number of those who used to work at the media companies.

Ghosh, who remains incommunicado, issued a statement on Facebook, saying he was never a director in the group and that he had nothing to do with its “finance (and) accounts”.

He said he did not persuade Sen to launch or acquire media companies and that he was roped in only after the Saradha Group got into an alliance with Sangbad Pratidin, a Bengali daily, of which Ghosh was an editor.

This newspaper is owned by another Trinamool Congress Rajya Sabha member, Srinjoy Bose, and his family. Ghosh quit Sangbad Pratidin earlier this year.

Sen’s three-page letter, the subject line of which is “my last assessment and intimation to you”, shows his business had gone haywire because of huge commissions and unbridled expansion of the team of agents. It said he was more than willing to give up Saradha Realty to his “marketing members” or a court-appointed receiver.

While asking for six months to a year for repayment of matured deposits, he said a software bug had resulted in a large number of fake receipts being issued in the name of Saradha Realty. A chartered accountant Mint interviewed on Thursday had predicted that Sen could disown liabilities by declaring receipts as forgeries because they were not accounted for in the balance sheet.

Sunil Kumar Gupta Roy, an independent chartered accountant, who audited the books of Saradha Realty till fiscal 2010-11, said he did not ever examine them closely. Citing his age, Gupta Roy, 71, said he was only expected to sign the papers as told, and he obliged for a fee of Rs.5 lakh.

“I have only recently come to know that the Saradha Group took public deposits,” said Gupta Roy, who was the auditor for 25 companies run by Sen. “If I knew what the group was up to, I wouldn’t have agreed to be its auditor.”

Gupta Roy said Saradha Realty’s accounts for fiscal 2011-12 had not been finalized and audited. “I was told that the company had received some extension from the Registrar of Companies to file its balance sheet,” he added.

Courtesy:
Romita Datta |  Manish Basu
First Published: Fri, Apr 19 2013. 11 25 PM IST
Updated: Mon, Apr 22 2013. 04 28 PM IST
http://www.livemint.com/Companies/9TRfLolUhZr9T0KWc7NNWP/Saradha-Group-crisis-reaches-CMs-doorstep.html

RBI bans chit funds from taking public deposits

Mumbai: The Reserve Bank of India (RBI) has banned chit funds from accepting public deposits with immediate effect, the central bank said in a Friday notification.

Any deposits accepted by miscellaneous non-banking companies, “other than from its shareholders as on date shall be repaid on maturity and shall not be eligible for renewal,” RBI said.
Courtesy:
Staff writer
First Published: Fri, Aug 28 2009. 11 40 PM IST
http://www.livemint.com/Politics/Z1r5sMIukF56xMCz6KEBQM/RBI-bans-chit-funds-from-taking-public-deposits.html

Big West Bengal deposit-taking firm defaults on repayments

CMD’s arrest ordered, Saradha Group on verge of collapse; more such firms likely to collapse in same way

Kolkata: The time bomb that has been ticking away in West Bengal may be about to go off.

One of eastern India’s biggest deposit-taking companies—the Saradha Group—is on the verge of collapse. The state administration has ordered the arrest of its chairman and managing director (CMD) Sudipta Sen for defaulting on repayments.

“The honeymoon is over—the chief minister (Mamata Banerjee) wants him arrested,” said a key government official who did not want to be identified. “We are confident that we will be able to nab him in a day or two.”

Sen, who according to the state administration is on the run, could not be contacted for comment.

More are likely to collapse in the same way even before the state promulgates a proposed law to contain the growth of deposit-taking companies, said a finance department official, asking not to be named.

This could happen within days, according to this official.

It isn’t immediately known how much money the Saradha Group owes its depositors. According to some estimates, including those of the state administration, it could run into thousands of crores of rupees.

Pressure on the group’s finances forced it to wind up, over the past few weeks, at least 10 media organizations—newspapers and television channels—that it had launched or acquired since 2010-11.

The closure made at least 1,000 journalists and technicians redundant in Kolkata, making it the biggest layoff in the media industry in eastern India.

Trinamool Congress leaders such as general secretary Mukul Roy and Partha Chatterjee, the state’s minister for commerce and industries, are looking for investors to rescue some of the media organizations that have closed.

The administration swung into action on Wednesday after at least 200 commission agents of the Saradha Group from across the state came en masse to Kolkata to meet Roy.

They asked for the state government’s immediate intervention to recover money from the group, which, according to these agents, started defaulting on repayments last month.

In the event of defaults, agents typically face the ire of depositors because they mobilize money largely on the strength of their own credibility.

The state government assured them that it will take necessary steps to seize all assets of the Saradha Group by the weekend, the agents said after their meeting with Roy. Even so, they fear the state may not be able to recover anything from the 100-odd companies that the group ran.

The group management had already started liquidating assets and there may not be much left on the books of its firms, they said.

Debasish Banerjee, an agent from Sonarpur in Kolkata’s suburbs, said Rs.6 crore was immediately required to repay matured deposits. “Our team leaders are scared of being lynched,” he added.

Another agent, Shaukat Ali from Murshidabad, said agents were initially asked to settle repayment claims on their own from fresh deposits collected by them, “but we soon realized that it was impossible for us to sustain that for a long time”.

Ali, who along with his sub-agents used to collect Rs.60-70 lakh a month until the end of last year, said he and other agents feared they would soon be driven from their homes by the depositors.

“Some agents have already fled their homes,” he said.

Agents from the northern part of West Bengal said the Saradha Group started defaulting on repayments in January. Some cheques bounced because there wasn’t enough money in the group’s bank accounts, they said. These agents refused to be identified.

Some agents managed to get an audience with Sen at his office in Kolkata last week. They were told they would be given power of attorney, or legal authority, to sell land held by the company to repay depositors, said an agent from Dakshin Dinajpur district. He did not want to be identified. It is not known how much land the group owns.

While the agents of the group fear an imminent collapse, this hasn’t stopped several other companies in West Bengal from raising public deposits in the name of fictitious business ventures, selling instruments that are beyond the jurisdiction of India’s securities market and banking regulators.

Most of the older deposit-taking groups were founded in 2007-08, and the instruments they initially sold were mostly of five-year maturity. These deposits are now due for repayment, according to the state finance department official.

Historically, the collapse of a deposit-taking company leaves a trail of ruin and suicide in its wake. The biggest such collapse in West Bengal thus far was that of Sanchayita Investments, a partnership firm that went bust in the early 1980s. A large number of its depositors killed themselves after they failed to recover their savings.
Courtesy:
Romita Datta |  Manish Basu
First Published: Wed, Apr 17 2013. 11 45 PM IST
Updated: Mon, Apr 22 2013. 04 26 PM IST
First Published: Wed, Apr 17 2013. 11 45 PM IST
http://www.livemint.com/Industry/hzEvUwFDZTrboyWUFhPQsM/Big-West-Bengal-deposittaking-firm-default-on-repayments.html

Saradha Group crisis deepens as depositor commits suicide

Offices of the firm mobbed across the state; chairman and managing director Sudipta Sen remained on the run

Kolkata: The crisis that started last week with a West Bengal company defrauding small depositors deepened on Sunday with a woman committing suicide, allegedly over losing her entire savings of Rs.30,000 to the Saradha Group.

Pressure mounted on the state government even as offices of the deposit-taking firm continued to be mobbed across the state, and its chairman and managing director Sudipta Sen remained on the run.

At risk is at least Rs.20,000 crore, mostly in small savings from the poor, who can ill-afford the loss, state officials said.

Their estimate is based on the decline in deposits in state-run small savings schemes in the past five-six years. This amount is thought to have been diverted to private firms such as those of the Saradha Group, which promised higher returns.

“Companies like these have ruined household savings in West Bengal in every decade since the 1980s, but this crisis is completely different because of its magnitude,” a state government official said, requesting anonymity.

West Bengal is planning to introduce a new law to flush out deposit-taking companies, said Mukul Roy, general secretary of the ruling Trinamool Congress party. However, such a law will take at least six months to be implemented because it would need the consent of the Union government, officials said.

The current crisis, from which a “law-and-order situation has already arisen”, is not a rerun of anything experienced by the state administration before, said the official cited earlier,

A contagion is unavoidable, according to government officials consulted over the crisis, and will only extend people’s losses. Other deposit-taking firms that have yet not defaulted on repayment will collapse one by one because fresh collections will dry up, they said. None of the officials wanted to be named.

The image of the Trinamool Congress, led by chief minister Mamata Banerjee, has taken a severe beating on account of the undeniable proximity of some key Trinamool Congress leaders to deposit-taking companies such as the Saradha Group.

Kunal Ghosh, a Rajya Sabha member nominated by the Trinamool Congress, was editor and chief executive of the Saradha Group’s now mothballed media business.

Ghosh, who could not be contacted despite repeated attempts, said in a Facebook post on Friday that he had joined the Saradha Group as an employee after it entered into an alliance with Sangbad Pratidin, a Bengali newspaper that he edited and that was owned by Srinjoy Bose, another Trinamool Congress Rajya Sabha member.

The crisis couldn’t have happened at a worse time for Trinamool Congress because the state soon goes to panchayat (village council) polls, ahead of the 2014 general election.

Mukul Roy and commerce and industries minister Partha Chatterjee said no one will be spared if found to have helped the Saradha Group to expand its business, but they tried to dissociate their party from the company.

“Those involved will pay the price, but they are individuals, not the party. You could take these as the chief minister’s words, not just mine,” Chatterjee said, indicating that the Trinamool Congress will weed out some of its leaders to protect its image.

Roy alleged that these deposit-taking companies started business in 2008 or thereabouts with the approval of the erstwhile Left Front government.

But former finance minister Asim Dasgupta said the state government under the Left Front’s rule had launched a probe into the affairs of four such firms, including the Saradha Group. “What happened to these investigations?” he asked.

The investigations were dropped after the Trinamool Congress came to power in 2011, a police officer involved in the matter said, requesting anonymity.

While officials racked their brains at Writers’ Buildings, the state secretariat, the human crisis fast escalated.

At least two people have killed themselves over the past three days over the Saradha Group mess. Urmila Pramanik, 50, who had deposited her savings of Rs.30,000 with the Saradha Group, set herself ablaze on Sunday. She succumbed to burn injuries at a Kolkata hospital.

Another Saradha Group agent in Diamond Harbour in South 24 Parganas district consumed poison on Sunday after he was attacked at his home by depositors. His condition was last reported to be critical.

Offices of the Saradha Group and other deposit-taking companies were vandalized across the state. Roads were blocked in protest, and skirmishes were reported from across the state over the weekend.

Depositors from across the state said they had thought their money to be safe in the hands of the Saradha Group because of its proximity to Trinamool Congress leaders, which they viewed as official endorsement of its diverse businesses. Most of those, though, did not ever exist, show filings with the Registrar of Companies.
Courtesy:
Romita Datta 
First Published: Sun, Apr 21 2013. 11 54 PM IST
Updated: Mon, Apr 22 2013. 04 30 PM IST
First Published: Sun, Apr 21 2013. 11 54 PM IST
http://www.livemint.com/Companies/JFrhz2viiI9Kjv1OdATWzJ/Saradha-Group-crisis-deepens-as-depositor-commits-suicide.html

Agents bear brunt of Saradha collapse

Depositors of Saradha Group are making off with whatever they can lay their hands on in agents’ homesSonarpur, South 24 Parganas (West Bengal): He had spurned the offer of a Rs.50,000-a-month job at the Saradha Group to keep working as one of its agents. Today, after one of eastern India’s biggest deposit-taking companies collapsed, Debasish Banerjee is counting the losses he inflicted on depositors—Rs.60 crore.

Now in his mid-50s, Banerjee was one of the blue-eyed boys of Sudipta Sen, the fugitive chairman and managing director of the Saradha Group, and presided over a chain of 10,000 sub-agents spread over eight districts in West Bengal.

Banerjee cut his teeth in door-to-door deposit collection in the early 1980s as an agent of Peerless General Finance and Investment Co. Ltd—a residuary non-banking company, which pioneered in collecting small savings. Though it didn’t ever default on repayments, Reserve Bank of India (RBI) forced Peerless to stop taking deposits in 2005-2006. This spawned the growth of unregulated deposit-taking companies in West Bengal and other eastern Indian states.
Exploiting the strength of Peerless’s impeccable repayment track record, its redundant field agents helped found new firms that went after people’s savings, mostly in rural areas.

Among those that Banerjee recruited to collect deposits for the Saradha Group was Ayan Naiyya—an unemployed youth of 24. Naiyya says he mobilized Rs.60 lakh from one Nischindapur village in South 24-Parganas district, where he lives.

There are around 5,000 unemployed people in Nischindapur and other adjoining villages. At least 300 of them became agents of the Saradha Group, according to Naiyya, who used to earn around Rs.8,000 a month as commission. At least half of the agents from Nischindapur are now on the run for fear of being lynched.

Not just the unemployed youth, Banerjee managed to rope in a large number of housewives to work for the Saradha Group. One such was Rupa Naskar, who says she has been driven out of her home by her in-laws because she had collected Rs.1.5 lakh from neighbours for the Saradha Group. They vandalized her home on hearing last week that the group had gone bust and there was little hope of recovering their deposits. She sold her jewellery to repay them from her own kitty, but couldn’t.

Naskar says she started working as an agent of the Saradha Group to augment her family income.
Her husband works as a contract labour, and the Rs.3,000-4,000 she earned every month from commissions “meant a lot for us”.

When the going was good, Sraboni Ghosh, a lowly district official in South 24-Parganas district, bought herself a scooter with her monthly commission of Rs. 20,000 from the Saradha Group, but has had to flee her home. The scooter, she says, must have been taken by her depositors.
In South 24-Parganas district, depositors have not only vandalized the Saradha Group’s offices, they are making off with whatever they can lay their hands on in agents’ homes, Banerjee says.
“We have a full-blown law and order situation,” said a key government official being consulted on the crisis. He did not wish to be named.

Returns promised by the Saradha Group and other deposit-taking firms were higher than highstreet banks and the government’s small savings schemes. They used to offer 15-18% annualized returns on short-term deposits, but for the people they targeted, that little bit more made a lot of difference.

After retiring from Garden Reach Shipbuilders and Engineers Ltd—a public sector firm—Sankar Das deposited Rs.5 lakh in a monthly income scheme run by the Saradha Group.

He had initially deposited his retirement benefits with a bank and was receiving around Rs.6,000 in interest, he says. The Saradha Group’s scheme promised him Rs.1,500 more per month. He fell for it because he needs to support his son, who, working at a laundry, doesn’t earn enough to support his wife and children.

A large number of agents, too, have lost their own savings.

Munnat Ali Naskar, who raised Rs.28 lakh for the Saradha Group, had deposited his family’s own savings of Rs.4 lakh. His savings gone, he has even been hounded out of his home.
“Poor people will explore all possible ways to increase their income,” says Amiya Bagchi, a former professor and an economist, adding that the poor are “gullible” and easily get carried away by promises of even marginally higher returns.

“As for the women, they are worse off,” Bagchi says. “It is hardly surprising that they look for ways to make the extra buck because they are often abandoned by their husbands and have to fend for themselves.”

Because the Union government stopped paying commission to agents who collected deposits for state-run small savings schemes such as the Public Provident Fund, they turned to private firms, said Asim Dasgupta, West Bengal’s former finance minister and an economist.

Firms such as the Saradha Group paid huge commissions, going up to 30% of deposits collected. This was shared across the chain with the person at the bottom of the layered marketing chain receiving around 10%.

The Saradha Group’s Sen said in a recent undated letter to his so-called marketing members, or people such as Sonarpur’s Banerjee, that his business collapsed because of the unviable commission structure and the unbridled expansion of the sales force.

The group, it appears, collapsed under its own weight, having spread across West Bengal and other neighbouring states at a breakneck speed.

And it started from a district where its penetration was almost unrivalled—South 24 Parganas, says Banerjee. “It all started late last year when cheques bounced and it became increasingly difficult to convince people to give more money,” he recalls.
Courtesy:
Romita Datta Mail Me
First Published: Sun, Apr 21 2013. 11 51 PM IST
Updated: Mon, Apr 22 2013. 04 29 PM IST
First Published: Sun, Apr 21 2013. 11 51 PM IST
http://www.livemint.com/Industry/fsBj2Ukx72pKVJzbm3bMmJ/Agents-bear-brunt-of-Saradha-collapse.html

Saradha Group crisis deepens as depositor commits suicide

Offices of the firm mobbed across the state; chairman and managing director Sudipta Sen remained on the run
Kolkata: The crisis that started last week with a West Bengal company defrauding small depositors deepened on Sunday with a woman committing suicide, allegedly over losing her entire savings of Rs.30,000 to the Saradha Group.

Pressure mounted on the state government even as offices of the deposit-taking firm continued to be mobbed across the state, and its chairman and managing director Sudipta Sen remained on the run.

At risk is at least Rs.20,000 crore, mostly in small savings from the poor, who can ill-afford the loss, state officials said.

Their estimate is based on the decline in deposits in state-run small savings schemes in the past five-six years. This amount is thought to have been diverted to private firms such as those of the Saradha Group, which promised higher returns.

“Companies like these have ruined household savings in West Bengal in every decade since the 1980s, but this crisis is completely different because of its magnitude,” a state government official said, requesting anonymity.

West Bengal is planning to introduce a new law to flush out deposit-taking companies, said Mukul Roy, general secretary of the ruling Trinamool Congress party. However, such a law will take at least six months to be implemented because it would need the consent of the Union government, officials said.

The current crisis, from which a “law-and-order situation has already arisen”, is not a rerun of anything experienced by the state administration before, said the official cited earlier,
A contagion is unavoidable, according to government officials consulted over the crisis, and will only extend people’s losses. Other deposit-taking firms that have yet not defaulted on repayment will collapse one by one because fresh collections will dry up, they said. None of the officials wanted to be named.

The image of the Trinamool Congress, led by chief minister Mamata Banerjee, has taken a severe beating on account of the undeniable proximity of some key Trinamool Congress leaders to deposit-taking companies such as the Saradha Group.

Kunal Ghosh, a Rajya Sabha member nominated by the Trinamool Congress, was editor and chief executive of the Saradha Group’s now mothballed media business.

Ghosh, who could not be contacted despite repeated attempts, said in a Facebook post on Friday that he had joined the Saradha Group as an employee after it entered into an alliance with Sangbad Pratidin, a Bengali newspaper that he edited and that was owned by Srinjoy Bose, another Trinamool Congress Rajya Sabha member.

The crisis couldn’t have happened at a worse time for Trinamool Congress because the state soon goes to panchayat (village council) polls, ahead of the 2014 general election.

Mukul Roy and commerce and industries minister Partha Chatterjee said no one will be spared if found to have helped the Saradha Group to expand its business, but they tried to dissociate their party from the company.

“Those involved will pay the price, but they are individuals, not the party. You could take these as the chief minister’s words, not just mine,” Chatterjee said, indicating that the Trinamool Congress will weed out some of its leaders to protect its image.

Roy alleged that these deposit-taking companies started business in 2008 or thereabouts with the approval of the erstwhile Left Front government.

But former finance minister Asim Dasgupta said the state government under the Left Front’s rule had launched a probe into the affairs of four such firms, including the Saradha Group. “What happened to these investigations?” he asked.

The investigations were dropped after the Trinamool Congress came to power in 2011, a police officer involved in the matter said, requesting anonymity.

While officials racked their brains at Writers’ Buildings, the state secretariat, the human crisis fast escalated.

At least two people have killed themselves over the past three days over the Saradha Group mess. Urmila Pramanik, 50, who had deposited her savings of Rs.30,000 with the Saradha Group, set herself ablaze on Sunday. She succumbed to burn injuries at a Kolkata hospital.
Another Saradha Group agent in Diamond Harbour in South 24 Parganas district consumed poison on Sunday after he was attacked at his home by depositors. His condition was last reported to be critical.

Offices of the Saradha Group and other deposit-taking companies were vandalized across the state. Roads were blocked in protest, and skirmishes were reported from across the state over the weekend.

Depositors from across the state said they had thought their money to be safe in the hands of the Saradha Group because of its proximity to Trinamool Congress leaders, which they viewed as official endorsement of its diverse businesses. Most of those, though, did not ever exist, show filings with the Registrar of Companies.
Courtesy:
Romita Datta Mail Me
First Published: Sun, Apr 21 2013. 11 54 PM IST
Updated: Mon, Apr 22 2013. 04 30 PM IST
First Published: Sun, Apr 21 2013. 11 54 PM IST
http://www.livemint.com/Companies/JFrhz2viiI9Kjv1OdATWzJ/Saradha-Group-crisis-deepens-as-depositor-commits-suicide.html

Bengal chit fund boss held in J&K

Srinagar/Kolkata: It was his fear of flying that finally brought Saradha Group boss Sudipta Sen crashing down. The man wanted for defrauding thousands of investors of crores of rupees in Bengal since his chit fund went bust last week, left his footprints at every highway toll plaza during his 2,000km road run and was finally tracked down to a plush hotel in Sonmarg, Jammu & Kashmir, on Tuesday afternoon.

Along with Sen, a Kolkata police team arrested Saradha Group executive director Debjani Mukherjee and Arvind Chauhan, a senior official of the company who handled the Jharkhand operations. Debjani had a meteoric rise in Sen’s firm, rising from receptionist to No. 2 in just three years. Kumar was a trusted aide who did all the driving from Ranchi, say police.

Strangely, Sen left an easyto-follow trail during his crosscountry run by using an SUV with Bengal number plates, staying in expensive hotels and flashing cash all along the way and finally choosing to hide in Kashmir where he would have to show his ID card everywhere he went. Also, by leaving behind his personal driver Bapi at Ranchi, he gave police the first big lead in tracking him down.

According to police, Sen, Debjani and Arvind left Kolkata at 4am on April 10 in a white Scorpio driven by Bapi. They reached Ranchi by afternoon, where Sen ditched the vehicle and asked Bapi to return home. They checked into a hotel, got into another white Scorpio with Bengal number plates and went off the next day.

It was from Bapi that the police got to know about the the Ranchi trip. Cops then tracked down the hotel and got the registration number of the other car (WB22U-6742). Footage from toll plaza records in Ranchi showed that the trio was on their way to Delhi .

The Scorpio was traced in Agra, Delhi, Dehradun, Mussoorie, Haldwani, Haridwar, Bhatinda and Udhampur. But everywhere the information was a day or two late.

The trio reached Srinagar on Monday evening and booked a room in Arvind’s name, say police. Kashmir police noted the WB number plates and raided the hotel. Sen, Debjani and Arvind have been booked under Sections 420, 406 and 506 of IPC.

Debjani’s lawyers, however, accused the police of lying. They say she was held in “confinement” from April 16 and was arrested when she was already on her way to Kolkata to surrender.
Courtesy:
TIMES NEWS NETWORK
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/04/24&PageLabel=15&EntityId=Ar01501&ViewMode=HTML

WEST BENGAL : CHEAT FUND RAJ : Promises On Paper

Bengal’s chit funds often act roguishly, but Mamata needs the media they own
On a rain-lashed monsoon morning, Santosh Bera, 60, who works as a peon in a Calcutta advertising agency, was just setting out to work when his wife rushed in from outside, crying. “They ran away with all our money,” she sobbed. She then confessed that she had secretly invested the Rs 10,000 they had been saving up for a rainy day in a “chit fund”. Every month for the last ten months, she went down to “an office” in Park Circus in central Calcutta and deposited Rs 1,000 with “an agent”, and was handed a receipt scribbled on a chit of paper in return. She was promised that on the twelfth month she would get back double the amount with interest.

But that day, when she went to the chit fund office, “what she found was a double lock on the door,” says Bera.

Pointing out that “Rs 10,000 is a lot of money for people like us and that it takes a lifetime to save,” Bera nevertheless admits that he has recently invested in another chit fund, “because my brother, who has become an agent for one, convinced me in spite of my misgivings”.

Last week, the central corporate affairs department reported that at least 62 dubious chit fund companies are operating in West Bengal and they have amassed  close to Rs 15,000 crore. In December last year, the RBI initiated action against two chit fund companies—Sunmarg Welfare Society and Amazon Capital—for using the name of the regulator to solicit deposits from the public. The RBI issued advertisements clarifying that it would not stand guarantee to the investment options being floated by the two companies.

“In the past, chit funds did not control the media in the way they do now. And we did not depend on such media.”Mohammed Salim, CPI(M) leader   

Congress MP Adhir Chowdhury told Outlook, “We have alerted the prime minister about the widespread prevalence of this dubious non-banking financial institution in Bengal, which I call ‘cheat funds’, because they are cheating hundreds and thousands of poor people from the villages and small towns of their meagre earnings or life’s savings.” TMC MP Somen Mitra has also sent a similar letter to Manmohan Singh, pointing to the chit fund menace in the state.

By all accounts, Bera, the quintessential ‘common man’, fits the third element of West Bengal chief minister Mamata Banerjee’s “Ma, Mati, Manush”. The question is why Mamata, whose avowed ‘honesty and transparency’ (‘shototar protik’) played not a small part in her rise, is not initiating action, or at least an investigation, against these chit fund companies?

The answer to that question is intertwined with the answer to another question: who owns some of the blatantly pro-establishment (read pro-Mamata) broadcast channels and print media houses that have mushroomed over the past few years, ever since the Left has been on the decline? The answer: chit fund companies (see box).

While Mamata has never spoken publicly in favour of chit funds, insiders reveal that “unofficially, she protects them”. In fact, it isn’t even that unofficial, if one considers the fact that among her MPs and MLAs are those who have direct links with chit funds. TMC’s industrialist-MP K.D. Singh owns a chit fund. TMC Rajya Sabha MP Kunal Ghosh edits the pro-TMC Bengali daily Sambad Pratidin and is a top boss at Channel 10. In an interview to Outlook, Ghosh lashes out at the indiscriminate stigmatisation of all chit funds, and the “dragging of all the chit funds under one generic ‘shady’ umbrella.”

“A distinction should be made. Not all the chit funds are bad. There are allegations against some and I am not condoning those. All the owners of chit funds should be called by the regulatory authorities and the dealings should be investigated thoroughly and the chit funds should be brought under the regulatory bodies,” he says. Ghosh argues that the present noise about chit funds is politically motivated and a direct fallout of the TMC’s pulling the plug on the UPA-II government. As he points out, “Chit funds grew over a period of several decades, when the Left Front was in power. Why question it now?”

Moreover, he observes that chit fund firms are now all-encompassing, having branched out into areas such as real estate and the hospitality industry, not to mention the media. “Chit fund companies employ thousands of people (he puts the employment figure in media alone to at least 4,000-5,000). If chit funds are shut down, all these jobs will be lost,” says Ghosh. And taking a dig at the mainstream media, which looks down upon chit fund-owned media, Ghosh asks: “The media which is shouting against chit funds, can they do without their ads?” Ghosh has a point. Advertisements of chit funds are ubiquitous in Bengal’s non-chit fund-funded, mainstream media, both print and electronic. Nor are allegations by the TMC, that the sudden flagging of the chit fund issue by the Centre is politically motivated, all that impossible.

“Chit funds grew over decades when the Left was in power. Why question it now? If they’re shut, many will lose jobs.”Kunal Ghosh, Trinamool Rajya Sabha MP   

Scores of people across Bengal—not just in villages and towns but also in Calcutta—have been duped by shady chit fund companies for decades. The notorious Sanchaita episode of the late 1970s, when investors were cheated of hundreds of thousands of rupees, was one of the first such examples.

Making a distinction between the existence of chit funds in their time and now, CPI(M) central committee member Mohammed Salim told Outlook, “What makes it dangerous is that at that time the chit fund owners did not control the media the way they are doing now. And we did not depend on such media to reach out to the people.”

Establishing a link between chit fund companies and the TMC, Salim further points out that the sectors in which the pre-election TMC manifesto promised development included tourism and hospitality—the very same areas where chit fund companies have branched out and channelised funds.

Indeed, TMC members speaking to Outlook did not openly deny close ties with chit fund firms, or even allegations that there exists a symbiotic relationship in which the companies are allowed to thrive in return for the government reaching out to the masses through the media these firms control.

The only thing to which the Trinamool must pay heed—on the pain of popular unrest—is that the masses to whom it reaches out through media flush with chit fund money are made up of the Santosh Beras of Bengal.

Chit fund companies and the channel/publication they patronise:
Sharda Group: Channel 10, Bengal Post, Sakalbela, Azad Hind and Parama
Rose Valley: News Time, Rupasi Bangla, Dhoom (music channel) and Khobor 365.
Angels Group: Abar Jungantor
Shine Group: Shan Bangla
Chakra Group: Ekdin
Rahul Group of Companies: R Plus
Tower Group: Swabhumi, Pratyohik Khobor
Courtesy:
Dola Mitra
http://www.outlookindia.com/article.aspx?282655

Receptionist to director in 3 yrs

Kolkata:Debjani Mukherjee, the 27-yearold Saradha Group executive director and group chairman Sudipta Sen’s confidante, was arrested with Sen and Arvind Chauhan, a senior official of the company, from an upmarket hotel in Srinagar on Tuesday. The de-facto Saradha Group number-two, Debjani was Sen’s shadow.

Debjani’s meteoric rise in the company — from a receptionist to the executive director in only three years — is as mysterious as most other things about the organization. Having joined the company as a receptionist-cum-telephone operator in 2008, Debjani moved to the company’s headquarters in seven months, where she found a seat in chairman Sudipta Sen’s chamber.

In a short time, she won Sen’s trust and, in 2011, became a director with Saradha Realty India Ltd. The other directors were Sen’s wife Madhumita, his son Subhojit and daughter Priyanka.

Debjani looked after the group’s banking and HR verticals and was the only person, besides Sen, who had the authority to sign company cheques — which sometimes bore amounts of over Rs 20 lakh. Sources claimed that she also signed several appointment letters.

The cellphone she used till her arrest on Tuesday remained registered in the name of Saradha Tours & Travels. A cell number which Sudipta often used was also registered in Debjani’s name. It was the “official” number provided to Debjani as director in Saradha Realty India (Ltd) and registered at the company’s Sector-V address.

Debjani, sources said, stopped attending office in March — several weeks before Sudipta followed suit. It gives credence to the belief among Saradha employees that Debjani was chalking out a plot for the couple to disappear. Debjani’s father, Timir Baran Mukherjee, was Sen’s close family friend, as was Debjani’s mother Sikha. Many believe that Mukherjee’s close proximity to local CPM leaders helped Sudipta in his rise.

Debjani’s lawyer, Abhisekh Mukherjee, said, “Debjani was asked not to attend office and has not been getting salary for several months. She was coerced into fleeing. In fact, she was thinking of surrendering when she was arrested.”

A former editor in one of a Sen’s publications recollected, “Sen sat next to Debjani in his own chamber. Sen and she appeared to be co-owners. At meetings, they sat on one side and faced us across the table. She was an executive director and was Sen’s eyes and ears. Debjani was also his constant companion on trips to other towns and cities.”

Another employee recounted that visitors to Sen were always vetted by Debjani. However urgent the matter was, it was difficult for anyone to get a call though to Sen without it being routed through Debjani.
Courtesy:
Saibal Sen TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/04/25&PageLabel=13&EntityId=Ar01303&ViewMode=HTML

Chit fund chief’s journey from a Naxalite to the ‘king of fraud’

Kolkata:Many have not heard of Shankaraditya Sen, an ambitious Naxal, who later turned into a land shark. Known as Shankar in his neighbourhood at the height of the Naxal movement in the 1970s, he had disappeared over a decade back, only to resurface with a new identity — Sudipta Sen.

The Saradha Group boss, accused of fleecing lakhs of poor investors, had ironically fought for the proletariat. He had met legendary Naxal leader Charu Mazumdar on a number of occasions and was even jailed in 1971-72 for pursuing the ultras’ cause.

Born in the mid-1950s (Sen’s passport mentions the date as March 30, 1959), he was the third among four siblings — Shukla, Shiladitya, Shankaraditya and Bikramaditya. His parents — Nripendranarayan and Renukana Sen — had migrated to Kolkata from Dhaka during Partition. “My fatherin-law worked at the Survey of India while my mother-in-law was at Calcutta Telephones,” said Sen’s brother’s wife.

Onkar Singh, a one-time neighbour and friend of Shankar, recounted the strong Naxalite base at the Entally neighbourhood in the 1960s and ’70s. “Shankar was a good orator. He could speak at length and hold people’s attention. Perhaps Charu Mazumdar saw some potential in him when he visited the area,” Singh said.

The turning point for Shankar came in jail where he met other Naxals as well as criminals and mid-rung politicians. By the time he stepped out, Shankar was a different man. He seemed to have wiped off the ultra-Left ideology and embraced capitalism. Using the network he developed in jail, Shankar turned into a land broker. “Even at that early stage, he had lofty ambitions. It was quite clear that he was not content being a small broker,” recounted an aide.

Over the next few years, he gained experience in a series of land deals in south Kolkata. By the mid-1980s, he had formed his own network.

“His new ring comprised many powerful people, including the very policemen who had arrested him. Many cops from the dreaded anti-Naxalite squad of Runu Guha Niyogi joined his team,” said a former ally of Shankar.

Shankar married Madhumita in the mid 1980s. A few years after that he moved out of his parent’s house with his wife and son, severing ties with the rest of the family. He met his family only twice after that.

“Shankar had turned a complete stranger. So much so that after our mother died in 2005, we were unable to contact him,” said Bikramaditya. None of the siblings knows when he changed his name, but they presume it could be some time towards the end of the 1990s or the beginning of the 2000s. The first document to carry his new identity was the passport issued in 2004.

Sudipta Sen alias Shankaraditya Sen had met Naxal leader Charu Mazumdar on a number of occasions and was jailed in 1971-72 for pursuing the ultras’ cause
Courtesy:
Caesar Mandal TNN
http://epaper.timesofindia.com/Default/Client.asp?Daily=TOIM&showST=true&login=default&pub=TOI&Enter=true&Skin=TOINEW

Even my cook is a director in the company, says Sudipta

Kolkata: Five days before he fled Bengal, Sudipta Sen chose his partner in escape. It was the same person he had mentioned in his letter to the CBI as his most trusted aide. He chose right. Arvind Chauhan, boss of Saradha’s Jharkhand operations, stuck with him till the end.

In the letter (a copy of which is with TOI), Sen suggests that the authorities can depend on him in case the government takes over Saradha or attaches property to pay back depositors. “In Jharkhand Arvind Chauhan, GM, is very honest and dedicated. He will extend all support to the special officer, but the land amount alone will not cover the total investors’ amount and the balance has to be taken from the Bengal property,” says the letter.

The 17-page letter is an attempt by Sen to disclose “everything and everyone”. It gives a glimpse into how he set up the empire of thousands of crores of rupees and names those “duped him, used him and backstabbed him (at gunpoint)” to make money from him.

According to Sen, the story began in June 2008 when a one Shib Narayan Das came to his office to meet him.Sen alleges that it was Das who sold him the idea of stepping into money market.

The offer was tempting, admits Sen. Of the total money generated from the market, Das and his team would retain 30%, and the rest would be returned to depositors after 10-12 years at the rate of 12% per annum. “I had to give them social protection and legal protection,” Sen writes, adding: “I did not apply my mind because I did not have any idea about the money market.” On July 8, 2008 Saradha Realty India Ltd was formed. Das was appointed director and shareholder and Subir Das was made marketing head.

“Truly, I did not know that the money from the people is in violation of the regulating authority like Sebi, RBI,” he writes. He admits that all the shareholders and directors “are dummies”. “Neither do they have any capacity to invest nor did they want to become director. They signed the consent letter only because of their relationship with me. Even my cook Hemanta Pradhan was included as director though he does not know the meaning of director,” he writes.
Courtesy:
Saibal Sen TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/04/25&PageLabel=13&EntityId=Ar01306&ViewMode=HTML

Taxpayers’ money Mamata’s Saradha balm : 500cr fund, sin tax on cigarettes

Kolkata: Mamata Banerjee will use tax-payers’ money to tackle a crisis spawned by a mega fraud. On Wednesday, the West Benal CM said the government would form a relief fund of Rs 500 crore “out of sympathy” to compensate lakhs of small investors who lost their money after the Saradha Group collapsed.

A 10% tax will be imposed on cigarettes to raise Rs 150 crore and the rest will be “gathered from other sources without putting pressure on the people”, Mamata said, adding that her government was playing “watchman to common people’s interests”. “We are sorry about the tax, but we must collect the money from somewhere. So, please smoke more frequently,” the CM said at a press meet at Writers’ Buildings, her jest taking reporters by surprise.

In a veiled defence of Trinamool MPs linked to the Saradha Group, Mamata said it’s not the “time to indulge in petty politics”. “Let’s help the poor people. It’s not fair to blame an individual journalist or nail him. There are others, but I won’t name them,” she said.

As if cautioning journalists, she said they would do well to remember that their organizations are dependent on advertisements. “There is an attempt to derail Bengal’s economy. Don’t be a party to that conspiracy. The government has to do a balancing act. We are not the authority that allows newspapers and channels to function. They need permission from the Centre,” she said.

The Trinamool chief said any party MP found guilty of violating the law will face punishment. “We shall punish the guilty.”

Mamata said that a gazette notification had been issued to set up an inquiry commission that will probe the Saradha collapse. Advertisements will soon be issued to announce the time and place where people can lodge their complaints. A special session of the assembly will be convened between April 29 and May 6 to introduce the new bill on protecting investors’ interests, the CM said. “We will try and get the old bill so that the new one can be introduced at the earliest. Once it is passed, we’ll have the power to seize the properties of unscrupulous firms and return money to investors,” said Mamata.

Cautioning people not to invest their hard-earned money without assessing a company’s credibility, she accused the Centre of making small savings unattractive. “The post-office is still the most reliable place to invest. But interest rates have been reduced. What will investors do?” she asked.

Centre denies role in Bengal scamNew Delhi: Countering CM Mamata Banerjee’s claim that it had a role in the Saradha chit fund scandal, the Centre has said state governments are responsible for regulating and registrations of such businesses.

Sources in the corporate affairs ministry said the funds are governed by the Chit Funds Act, 1982, under which businesses can be registered and regulated only by state governments. The clarification reflected the Centre’s desire to buffer itself from the political heat rising from chit fund scam. TNN 

SMOKE SCREEN
West Bengal chief minister Mamata Banerjee will use taxpayers’ money to tackle a crisis perpetrated by a mega fraud. She says the government will form a relief fund of 500 crore, to compensate the lakhs of small investors who lost money in the Saradha Group collapse

A 10% tax on cigarettes will be imposed to raise 150 crore and the rest will be “gathered from other sources without putting pressure on the people”, says Mamata

Saradha chit fund chairman Sudipta Sen and two other officials were brought to Kolkata on Wednesday

The Centre says it has no role in governing the chit fund business. 
Chit funds are governed by the Chit Funds Act, 1982. Under this Act, the chit fund businesses can be registered and regulated only by the respective state governments, said a source in the ministry of corporate affairs

- We are sorry about the tax, but we must collect the money from somewhere. So, please smoke more frequently | Mamata Banerjee, BENGAL CHIEF MINISTER
Courtesy:
TIMES NEWS NETWORK
http://epaper.timesofindia.com/Default/Client.asp?Daily=TOIM&showST=true&login=default&pub=TOI&Enter=true&Skin=TOINEW

Saradha boss’s letter bomb blows up in Trinamool, Congress’s face

Kolkata: Call it a diversionary tactic to confuse investigators or the desperate bid of a drowning man clutching at straws, Saradha Group CMD Sudipta Sen wrote an explosive tell-all letter to the CBI naming top national and state-level politicians on April 5—five days before his cross-country run.

“I shall be committing suicide any moment because I am feeling helpless,” says the letter, accusing a string of powerful politicians in West Bengal, Assam, Odisha and Jharkhand of taking money from him, “using him” and “backstabbing him at gunpoint”.

Among those Sen has named are Trinamool Congress MPs Kunal Ghosh, former CEO of Saradha Group Media, and Srinjoy Bose, MD of Pratidin Publication that brings out the daily, Sangbad Pratidin. Both of them have denied the allegations.

Chief minister Mamata Banerjee announced that her government would set up a Rs 500-crore relief fund to pay back the Saradha depositors. She plans to rake in Rs 150 crore by hiking taxes on cigarettes by 10%, at the same time suggesting that people should “smoke more frequently”—notwithstanding what doctors may have to say on the subject.

Sen was flown to Kolkata from J&K along with his two close aides, Debjani Mukherjee and Arvind Singh Chauhan, after production before a Ganderbal court on a four-day transit remand.

Police suspect that Sen’s real name is Shankaraditya Sen, a Naxalite who frequently met Charu Mazumdar and was jailed in 1971-72. When Sen walked out of prison, he was a changed man, having replaced his passion for revolution with a thirst for money.

He emerged as land shark Shankar, who roped in some of the same policemen who had arrested him. He then disappeared in early 2000 to re-emerge as Sudipta Sen of the Saradha Group.

Copies of the 17-page letter (that the CBI received on April 6) reached media houses on Thursday, a day after Sen was arrested along with two senior Saradha officials from Sonmarg in Jammu and Kashmir. TOI was the first to gain access to the excerpts of the letter on April 22 and carried the report on the mysterious leak the next day.

From the letter, it seems Sen knew his empire was crumbling and started devising ways to protect himself. The man facing a multi-pronged investigation himself demanded an “independent inquiry” into his company’s meltdown. Sen recounts how Ghosh with the backing of the Bengal media group that he worked with “led the attack against Saradha” after a meeting with a minister of the Left Front government. The Saradha CMD claims that he made forays in the media sector to “protect himself from the attack”. So, when the owner of a Bengali media house offered to sell Channel 10, Sen bought it for Rs 24 crore, the letter says.

Soon after the channel went on air, the Bengali media house represented by two persons who later became Trinamool MPs settled for a truce with the Saradha Group on condition that Saradha shelled out Rs 60 lakh a month to the media house for news support and appoint one of them as CEO of the channel with a monthly salary of Rs 15 lakh, says the letter. They also wanted to engage a renowned Bengali actor as the channel’s brand ambassador for a monthly salary of Rs 20 lakh, Sen claims.

“The Bengali media house assured me that the agreement will help me protect my business from the government because they have a close connection with chief minister Mamata Banerjee. In the last two years, the Bengali media house took Rs 20 crore, most of the payment made by cheque or by RTGS. For the other one, we used to give Rs 1.5 lakh in cash each month over and above the salary to maintain his car and other social work,” Sen writes in his letter to the CBI.

According to Sen, the money couldn’t protect him from further embarrassment. “Kunal Ghosh came with some miscreants to my Sector V office and forced me to sign some documents and letters, which I did without going through the documents. I read and found that they have got me to sign as though I have sold the channel for a meagre Rs 55 lakh, which can never happen. They also got me to sign as if I have transferred to them my Urdu newspaper Kalom, which I have never done,” the Saradha Group CMD says.



‘CHEAT’ FUND BUBBLE BURSTS 
Total investment 2,000cr
No of investors 2,50,000
No of people arrested so far 6

MODUS OPERANDI | Saradha got advances from investors as contribution for allotment of plots or flats besides a money-back option. Investors could cancel booking to get back money with compound interest from 12%-24%

THE GROUP | Had over 100 registered firms. Flagship was Saradha Realty India Ltd with Sudipta Sen as CMD. Other functional firms — Saradha Printing & Publications and Saradha Tours & Travels. Most others front companies for siphoning off funds from Saradha Realty

THE NAMES | Before fleeing, Sen wrote to CBI, naming Trinamool MPs Kunal Ghosh and Srinjoy Bose as having taken money from him and ‘backstabbed him at gunpoint’ I paid WB media house 20 crore in 2 years: Sen I n the letter, the prime accused in the Saradha payment default reveals how he “suffered attacks and extortion from influential politicians in Bengal” who also caused “damage to his company and depositors”.
Courtesy:
Saugata Roy TNN
http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=TOINEW&BaseHref=TOIM/2013/04/25&PageLabel=1&EntityId=Ar00100&ViewMode=HTML

TMC Govt in dock, chit-fund scam burns Bengal

The chit fund powder keg finally exploded in Bengal with its flames on Saturday reaching the Trinamool Congress Bhavan even as thousands of angry agents and depositors took to streets and gheraoed the ruling party headquarters demanding their money back.

People mostly from lower classes who were sucked into the vortex of reportedly Rs 17000-20,000 crore scam - biggest perhaps in the history of the State - engaged in street fights somewhere with the police and somewhere with Trinamool activists and ransacked the offices of Shardha group, the biggest of the micro-finance groups that downed its shutters over the past few weeks after  defaulting on the  payment of returns.

A day after protesting in front of Chief Minister Mamata Banerjee’s residence, the agitators whose numbers swelled by thousands on Saturday jammed the Trinamool Bhavan demanding an explanation from the party high-ups for its backing the group which reportedly had many Ministers and MPs of the ruling party as its promoters or as brand ambassadors.

Sudipto Sen the CMD Shardha group which ran the Bengal Post newspaper and had taken over many other news channels and newspapers earlier shut his media business early this month.

Allegations flew thick and fast throughout the day from all quarters implicating the Government and Trinamool big fishes. In the melee, a faint voice of defence was heard from former Railway Minister Mukul Roy who quoted the Chief Minister as saying that “Government was taking strong action and no person found guilty would be spared.”

He claimed that such groups had been functioning in Bengal for the past several years shifting the blame on “previous Left Front Government and the Congress Government in Delhi.”

State Transport Minister Madan Mitra called the matter “unfortunate” but insisted “the Government never pursued the people to invest in these shady funds.” When reminded that he was the president of one of the workers’ groups of the chit-fund agencies he said the “Government will take all actions to bring the guilty to book. No one would be spared.”

Notwithstanding prime accused Sudipto Sen who continued to claim that he had sufficiently greased the palms of many topnotch people both in Kolkata and Delhi and threatened to reveal their name was still not arrested.

Offices of the group were ransacked in Siliguri, Behrampore, Baruipore, Purulia and many other places police sources said.

Incidentally the chit-fund groups, which promised astronomical amounts for the depositors’ money, sucked out thousands of crores of rupees from the small-saving market that could otherwise have gone to State cooperative banks.

In fact, the average savings in the Government cooperative small savings in Bengal was around Rs 15,000 crore till 2011 but the amount dipped to barely Rs 200 crore in the past two years or so, Finance Ministry sources said, adding this dip had affected the Government’s loan taking capability also.

Opposition Congress, Left and the BJP launched a scathing attack on the Trinamool Government and the Chief Minister for promoting the chit-fund owners.

“There is a scam of Rs 20,000 crore presided over by this Government,” PCC president Pradip Bhattacharjee said alleging “the scam has not only robbed the State exchequer but also ruined the lakhs of lower class people.” He demanded a CBI probe into the scam apart from proper compensation for the victims.

While Mukul Roy dismissed the charges as “false, concocted and baseless,” his party colleague and MP Somen Mitra said “I alerted the Government against the mushrooming of these shady funds but nothing was done. Now we are reaping the consequence.”

CPI(M) central committee member Md Salim said “Trinamool has pushed Bengal into a verge of complete financial and administrative collapse” claiming the Chief Chief Minister herself was “indebted to the chit-fund wallahs.”

He said, “She inaugurated the newspapers of the Shardha group and made places for them in the Government libraries throwing out the traditional dailies” alleging how “the Shardha groups purchased her paintings for highest price.”

BJP State president Rahul Sinha said, “The scam was the result of allowing the chit-funds to operate for years with impunity.”

Curiously Government sources said a law enacted by the then Left Government in 2009 was still lying in Delhi for the Presidential assent. “Because the Trinamool was minting money through the chit-funds it did not pursue with the enactment of the draft Bill even when it was in power till last year,” Salim said.
Courtesy:
Sunday, 21 April 2013 | Saugar Sengupta | Kolkata | in Sunday Pioneer
http://www.dailypioneer.com/sunday-edition/sunday-pioneer/nation/tmc-govt-in-dock-chit-fund-scam-burns-bengal.html

'Mamata trying to save culprits in chit-fund mess'

Launching a blistering attack on Chief Minister Mamata Banerjee's government in West Bengal, the CPI-M Monday charged it with trying to save the culprits involved in the chit fund mess by setting up a commission.

The government set up a high-powered commission, headed by a former Calcutta High Court judge, and a special investigation team to unravel the chit fund mess in the wake of the Saradha Group going bust, affecting lakhs of depositors and agents.

The opposition Communist Party of India-Marxist (CPI-M), however, accused the Trinamool Congress government in the state of trying to buy time in the process and save the culprits involved in duping depositors.

"She (Banerjee) said which is lost (the money of the depositors) is lost. This was her message to the people! That means forget about the money which you people have lost in the chit-fund mess," Leader of the Opposition Surya Kanta Mishra alleged in a press conference, just after Banerjee announced the setting up of a probe commission.

Mishra also took a dig at Banerjee, also the Trinamool Congress supremo, for planning to bring in an ordinance to tackle chit-fund companies, saying it was for "buying more time" in the process.

"An ordinance will come up. After that it will go to the president for his assent. Then she (Banerjee) will do something. She would not do anything before that. In the meantime the culprits will runaway with the depositors' money," the CPI-M leader said.

Earlier, lakhs of depositors vented their anger across the state against the chit-fund funded Saradha Group, which is virtually on the verge of collapse.

There were incidents of clashes between the agents and the depositors who demanded their money back.

The depositors, mostly poor people in villages and small towns, had put their hard-earned money with the company's chit funds lured by the promise of high interest rates.
Courtesy:
Monday, 22 April 2013 | IANS | Kolkata
http://www.dailypioneer.com/top-stories/left-front-trinamool-clash-over-chit-fund-mess.html

Mamata blames Cong, LF for chit-fund scam

With thousands of duped investors taking to streets across the State and under intense pressure from the Opposition for her parties’ alleged role in the chit-fund gate, Bengal Chief Minister Mamata Banerjee on Monday hit back transferring the responsibility of the multi-crore scam on the Centre and the Left Front.

“Such shady funds and money laundering” were monitored by Delhi and the State Government was absolutely toothless in absence of appropriate laws to regulate them,” she said, announcing the formation of a four-member high-power commission to investigate into the alleged Rs 22,000 crore scam which has brought several lakh investors on the verge of ruin.

Alleging that “those who patronised the chit-funds are today shifting the blame on our head” Banerjee said, “It is the Centre that gives them licence and controls the chit-funds and money laundering through its organs like RBI and SEBI.”

Visibly anguished by its political fallout particularly after some visible faces of the Trinamool Congress including Ministers and MPs got sucked into the vortex of the “super-scam” the Chief Minister said “none of these funds are registered with the State Government. They are all registered with the Centre.”

Bengal was on the boil for the past a few days after the Shardha Group the owner of the chit-fund business defaulted in payment. Anti-Government protests began after Shardha chief Sudipto Sen known for his close proximity to many a bigwig of the Government went missing.

“An amount Rs 70,000 or even more could be involved in the scam,” Banerjee said, adding much of the stolen money could have been siphoned out of the country. “Had the Centre or the previous Left Front Government taken action earlier then the situation could have been avoided. Now they are blaming our two-year-old Government,” she complained informing, “We acted soon after getting information from the CBI on April 15.”

Banerjee said she had asked the Centre to return a previous “faulty Bill” prepared by the Left lying with it for Presidential assent “following which we will go for an ordinance so that we can take immediate action on the matter.”

Ignoring questions as to why her Government did not heed the letters from her own party MP Somen Mitra or advisories sent by Union Minister Sachin Pilot, on the issue the Chief Minister said it was Delhi that was mainly responsible for small saving finding its way into the hands of shady operators.

“The Centre’s faulty policy of continuously reducing the interests on small savings is leading the people and the agents to make a beeline for the chit-funds,” she said.

On the reported association of a journalist-turned-Trinamool MP with a media division owned by the Group Banerjee said it was not possible for a journalist who was a mere employee to know the dark underbelly of the owners adding quickly “still if anyone has done something wrong then law will take its own course.”

Congress leader Abdul Mannan, however, wondered, “How a bare journalist-turned-CEO of the media division could draw a salary of Rs 16 lakh per month in a regional and new media.”

On why the Chief Minister inaugurated a host of newspapers belonging to the Group and even asked the people to read the stated papers, Banerjee said, “Anyone can inaugurate a newspaper if invited. So what is wrong in it?” She also said that the Groups funding of several of her Government’s social welfare schemes particularly in jangalmahal was only an extension of the Government’s policy of public-private-partnership.

Meanwhile even as thousands of people blockaded national highways, gheraoed Trinamool offices, ransacked hundreds of offices of the Group the Opposition Left and the Congress targeted the Chief Minister saying her decision to bring ordinance was a ploy to allow the fraudsters time to flee.

“This is a ploy to bail out Sudipto Sen,” Biman Bose Left Front chairman said while Opposition Leader Suryakanto Mishra wondered what led the Shardha CMD to recently buy a painting of the Chief Minister for Rs 1.86 crore. “Is she a Picasso that her painting will sell for so much price?” he asked questioning the reason why Sen had bought the paintings and “what benefits she drew after buying it?”
Courtesy:
Tuesday, 23 April 2013 | Saugar Sengupta | Kolkata
http://www.dailypioneer.com/nation/mamata-blames-cong-lf-for-chit-fund-scam.html

Bengal in damage control, chit fund scam brings memories of '80s

The West Bengal government has stepped in for damage control after chit fund company Saradha Group went bust reviving memories of the collapse of Sanchayita Investments in the early eighties when several investors and agents committed suicide.

Sanchayita collected more than Rs 120 crore in 1980 before its offices were raided and it folded up with only a handful of people getting back a minuscule amount of money.

Two main promoters of the group were arrested with one of them Shambhu Maukherjee committing suicide and Swapan Guha being declared insolvent by the court.

Another accused Biharilal Morarka is still at large.

As for investors and agents there are reports of several committing suicide and a handful pinning hope against the hope with a criminal case dragging on in court for more than 30 years now.

The West Bengal government has announced formation of a Special Investigation Team and a high-level inquiry into chitfund companies after the collapse of the Saradha group.

The bubble burst after capital market regulator SEBI started cracking the whip on chit fund companies for flouting rules, triggering pressure on the group's finances.

The Union Ministry of Corporate Affairs had also started looking into allegations of financial irregularities and default in payment levelled against the Saradha Group and other such companies.

The state government's action came after three people, who were either investors or agents of Saradha group, took their own lives as protests continued to rock several parts of the state with Saradha group chairman, Sudipto Sen on the run.

The TMC is currently on the backfoot after the chorus for arrest of its MP Kunal Ghosh, who was group media CEO of Saradha Group, when it forayed in big way into the media business by acquiring a number of newspapers in Bengali, English, Hindi and Urdu and taking over several news and entertainment channels.

Chief Minister Mamata Banerje has said that her TMC government was transparent and that the law would take its own course.

 With both the opposition CPI(M) and Congress blaming the Trinamool Congress for remaining silent on chit funds, Banerjee has said since the operations of chitfunds were governed by central laws and not by the state government, "the onus lies with the central government."

Squarely laying the blame on the erstwhile Left Front regime, Banerjee has said. "It was during Left regime that the business of chit funds mushroomed in the state. What were they doing? The law they had proposed to tackle chit funds with was flawed."

Contesting this, former finance minister and senior CPI(M) leader Asim Dasgupta said. "We had initiated action against the Saradha group and some other chit fund companies.

"The Trinamool government from the very beginning has taken a go slow approach towards them. After coming to power the investigations were simply put on the back burner," he alleged.

According to Dasgupta, who is also a noted economist, nearly 15 large chit fund companies including the Saradha group, have been operating in the state in last few years amassing over Rs 30,000 crore.

Economist Abhirup Sarkar added that small savings in banks and post offices had dipped to an all time low in the last two years and felt that neither the Trinamool Congress nor the Left regime had taken enough steps to tackle the mushrooming of chitfunds in the state.

"It is for the central government to regulate these chit funds but that doesn't mean that a state government will sit idly when these chit funds are fleecing people," Sarkar said.

"Nobody can deny that because of these chit funds, investments in small savings schemes of banks and post offices have dipped to an all time low in last two years," he said.

"It is fact that neither the previous Left regime nor the Trinamool Congress government showed much needed seriousness in tackling chitfunds," Sarkar said.

The Saradha group's fortunes nose diving has not only put a scanner on other chitfund companies operating in the state, but has also reportedly put a question mark on TMC's rural vote.

"This issue will be a big headache for Trinamool Congress rural vote bank. It will severely erode its rural votes," said a political scientist on condition of anonymity.

But the possibility of erosion in the rural votebank has been totally dismissed by Trinamool Congress General Secretary Mukul Roy.

CPI(M) leader Mohammed Salim claimed, "The impact will be disastrous compared to Sanchayita as the money involved is thousand of crores. The state government was aware of it but had delayed taking action in order to give them time to siphon off the money.
Courtesy:
By Pradipta Tapadar | PTI - KOLKATA
23rd April 2013 12:07 PM
http://newindianexpress.com/nation/Bengal-in-damage-control-chit-fund-scam-brings-memories-of-80s/2013/04/23/article1557850.ece