Innovative scamster dupes victims of Rs 3cr

MUMBAI: Money-doubling schemes have become so innovative and convincing that gullible investors often fall prey to them without questioning the veracity of the plans even once.

Mohan Patil from Wadala came up with a scheme where women who invested Rs 5,000 in the first month of pregnancy were promised Rs 46,000 on giving birth. In the second scheme, for an investment of Rs 4,000, Patil issued a ticket, that entitled them for a three- day-two-night stay at hotels in tourist spots. Patil transported them in his own buses and also arranged for lodging. After 120 days of the visit, the investors were promised Rs 12,000.

"The returns were directly proportionate to the investment," the police said. Patil was arrested by the EOW on Thursday.

Interestingly, when the police started sealing his offices, he came up with another idea. On Thursday, Patil, with his 'investors', took a morcha to Azad Maidan against the police. But this did not work out and soon after the protest got over, EOW arrested Patil, who has duped several people of Rs 3 crore.
Courtesy:
Ahmed Ali, TNN Feb 9, 2010, 01.49am IST
http://articles.timesofindia.indiatimes.com/2010-02-09/mumbai/28136977_1_gullible-investors-eow-scheme

Ex-director of fraud firm surrenders

MUMBAI: Former director of fraud firm Aryarup Travel and Club Resort surrendered before the Pune police last week. Vasuda Deshmukh, who is wanted in the multi-crore investment scam, will be brought to the city this week.

Nandkishore Patil from Nigadi police station in Pune said, "We have arrested Vasuda for a year-old fraud case. She is being questioned."

The city economic offences wing (EOW) had registered an FIR against Vasuda and her husband Ravindra in 2010. The Deshmukhs floated several schemes in Gujarat, Haryana, Jaipur, Bangalore and Maharashtra. Investors were promised annual returns of 86% to 96% if they put in Rs 5,000 and more in the schemes. Investors who brought in others were entitled to additional returns. The company had opened accounts of its investors on its website. "The suspects allotted login names and passwords to the investors and told them that their profit would be automatically transferred to their accounts. The Mumbai police are investigating the case under various sections of the Indian Penal Code and the Prize Chits and Money Circulation Schemes (Banning) Act, 1978," said a police officer.

The EOW had recently issued lookout notices against Vasuda and Ravindra. Sources said the firm's turnover was in excess of Rs 1,000 crore per annum. Aryarup claimed on various websites that it distributed over Rs 900 crore to its investors in one year. The firm also said that 400 of its investors had earned over Rs one crore.

Two plots, totaling 75 acres, owned by the company directors were attached by the EOW in February this year.

The total value of these plots is around Rs 12.30 crore, said sources. Besides, 17 bank accounts in which investors had deposited Rs 12.5 crore have also been frozen.

The firm had branches in Haryana, Gujarat and other states. In Maharashtra, the firm set up its offices in Buldhana Nashik, Nanded, Solapur, Parbhani, Jaipur, Thane, Navi Mumbai, Mumbai, Jalgaon, Bhusawal, Pune and Latur, among others. Sources said Aryarup could have more than one lakh investors

Daniel Pranjal, chief of direct selling consultancy firm Strategy India, said, "Several individuals start such companies promising high returns with the knowledge that they would have to keep getting money from new investors to pay off the old ones."

Pranjal said there are over 300 such companies operating in India and the schemes would have mobilized over Rs 7,000 crore till date.

Directors of Aryarup Travel & Club Resort—Ravindra Deshmukh and his wife Vasuda—are accused of duping over 1,000 people by offering to double their investments.
Courtesy:
Mateen Hafeez, TNN Aug 29, 2011, 03.27am IST
http://articles.timesofindia.indiatimes.com/2011-08-29/mumbai/29941037_1_investors-fraud-firm-bank-accounts

Hunt on for cheats

BELGAUM: The police have launched a manhunt for two online cheats who have absconded with crores of rupees from here recently.

Devidas Chodanakar and Prashant Chodanakar are the natives of Brahmanagar and Hindawadi in Belgaum, respectively. The duo operated an online multi-level marketing company and "allegedly" swindled crores by luring the gullible investors with double returns.
Courtesy:
TNN May 26, 2009, 10.50pm IST
http://articles.timesofindia.indiatimes.com/2009-05-26/hubli/28179462_1_hunt-gullible-investors-crores

Chargesheet against marketing company for 'duping' investors

MUMBAI: The Economic Offences Wing (EOW) has filed a chargesheet against multi-level marketing firm Raj Investment Services for allegedly duping many people of nearly Rs 26.92 crore.

The case was first registered with the Borivli police in January and transferred to the EOW in February. "Five persons were arrested," said an EOW officer. Police sources said the firm was floated in 1998. "It came up with several schemes and promised to double money in five years. Several people invested in different schemes.

The company office-bearers told the investors that their money had been invested in share trading in the share market the firm initially paid returns to the investors but stopped doing so after 2009," said the officer.

For this fraud, the police arrested Amulya Vaskar (45), his wife Vaishali, Sachin Palkar (35), Vilas Raikar (35) and Riya Bande (35) were arrested. While Vaskar is still at Arthur Road jail, others have managed to get bails. "The fraud could be bigger. The amount in our records, Rs 26.92 crore, is only of victims who have approached us.

There could be several others who have not come to us," the officer said.

The police have frozen the 42 bank accounts of the accused, containing Rs 50 lakh. The accounts are in the name of the company and its office-bearers.

The police have also identified 11 properties and a competent authority is yet to be appointed to attach these properties through a court order. The properties are in Pune, Nashik, Mandalgarh, etc. "We have asked tehsildars of the areas concerned not to entertain sale or purchase of these properties," the officer said.
Courtesy:
Mateen Hafeez, TNN Apr 29, 2012, 01.20AM IST
http://articles.timesofindia.indiatimes.com/2012-04-29/mumbai/31475568_1_duping-investors-eow-chargesheet

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
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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

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
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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
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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.
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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
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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:
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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.
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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
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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.
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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
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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
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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