Sunday, October 6, 2013

Chit fund scam dupes 7 lakh in Odisha



After the Saradha group financial fraud cases in West Bengal, Odisha is hit by scam.

When school teacher Basudev Mohapatra retired in 2012, he invested most of his retirement benefits, which amounted to Rs 7 lakh, with the Seashore Group that promised him a whopping 24 per cent interest annually for 6 years before returning his money. After a few months the interest payments stopped. The company even refused to return the invested amount. Basudev realised he had been duped.

“The company and its agent convinced us that if you keep your money in banks you will get only 8 per cent interest, but if you deposit in Seashore you will get 24 per cent. Since the company was running for the past several years in our area, we thought the government must have given it due permission to operate,” Mohapatra said.

Basudev is not alone. It is ascertained that nearly 7 lakh investors in Odisha are duped of about 20,000 crores of rupees by various operators. At least three dozens of such companies including Saradha group, Seashore group, AT group, Rose Valley group, Flourish India, Micro Finance group are operating in Odisha.

At least 177 people were arrested in different parts of Odisha the past week for their involvement in illegal money circulation and chit fund activities.

The crackdown on these firms began on May 10 and about 200 offices of 84 companies were raided, says Rajesh Kumar, deputy inspector general (economic offence wing) of the crime branch police. During the raids, police recovered incriminating documents pertaining to various chit fund activities in the state involving illegal circulation of money. Hundreds of accounts were seized and offices sealed.

Sources in the crime branch reveal that Seashore Group has duped over 80,000 investors and collected over Rs 600 crore. Seashore Chairman Prasant Dash was arrested and is now out on bail.

The Reserve Bank of India (RBI) lists 17 non-banking financial companies registered in Odisha and none are permitted to raise deposits from investors. But fraudulent companies attract depositors by posing as mutual fund firms and even as real estate businesses.

With regulatory bodies like the RBI, SEBI, the state finance department and the state police failing to act together, the fraudsters get away with hundreds of crores. “Multiple regulators and regulatory gap is perhaps giving opportunity to such fraudulent financial establishments to dupe investors.” said Jugal Kishore Mohapatra, Finance Secretary.
Courtesy:
Sunday, May 19, 2013, 8:21 IST | Place: Bhubaneswar | Agency: DNA
Debendra Prusty 
http://www.dnaindia.com/india/1836637/report-chit-fund-scam-dupes-7-lakh-in-odisha

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