Saradha chit fund scam at a glance

The Saradha chit fund scam is proving to be an exploding minefield for the Trinamool Congress, spelling trouble for Mamata Banerjee at regular intervals. The CBI on Friday arrested a third TC politician, Madan Mitra, in connection with the scam, prompting opposition parties in the state to demand the CM’s resignation. A look at the scam...


Origin

Triggered by the collapse of a Ponzi scheme run by Saradha Group, a consortium of over 239 private companies. The group collected money from over 1.7 million depositors before it collapsed in April 2013. The group ran pyramid schemes, mobilised deposits through four of its 239 registered companies, namely, Saradha Tour & Travels, Saradha Realty, Saradha Housing and Saradha Garden Resorts & Hotels.

Modus operandi

Initially, the group collected money from the public by issuing secured debentures and redeemable preferential bonds.

Since it drew the attention of market regulator Sebi, which confronted the group in 2009, it began raising money though variations of collective investment schemes involving tourism packages, forward travel and hotel booking timeshare credit transfer, real estate, infrastructure finance, and motorcycle manufacturing.
2009: Earliest warnings came from then MPs, Somendra Nath Mitra and Abu Hasem Khan Choudhury, and then state consumer affairs minister Sadhan Pande.

Rapid diversification

Invested in Bengali film industry; acquired and established local television channels and newspapers.

Invested around Rs 988 crore in its media division By 2013, employed around 1500 journalists, owned 8 newspapers.

TV channels: Tara News, Muzic, Bangla, Punjabi, TV South East Asia, Channel 10, one FM station In 2011, bought Global Auto, Landmark Cement.

December 2012: Group schemes began to unravel.

17 April 2013: 600 Saradha collection agents assembled before TMC office, demanded action.

23 April: A Sebi offi cially asked Saradha group to immediately desist from raising any further capital and return all deposits within three months Sudipto Sen, Debjani Mukherjee arrested.

18 April: Arrest warrant for Sudipto Sen was issued.

April 2014: Case lands in SC; In May, court orders CBI to investigate all Ponzi schemes, including Saradha, in Eastern India.

February 2014: Sen convicted for non-payment of PF dues. First conviction in scam case.

22 April: TMC govt announces commission headed by retired SC judge Assam govt suo moto registers 222 cases against Saradha group SLPs fi led in Calcutta and Guwahati HCs against Saradha.

Giveaways

Motorcyles for Kolkata Police Persuaded Mamata to use group’s ambulances/motorcyles for Jangalmahal area Invested in Mohun Bagan AC , East Bengal FC, sponsored Puja celebrations.