Thursday, April 25, 2013

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.

Romita Datta |  Manish Basu
First Published: Fri, Apr 19 2013. 11 25 PM IST
Updated: Mon, Apr 22 2013. 04 28 PM IST

1 comment:

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