What is Saradha chit fund scam?
- The Saradha Group financial scandal is popularly known as Saradha chit fund scam.
- It's a financial scam that was caused by the collapse of a Ponzi scheme run by Saradha Group in 2013.
- Saradha Group is a consortium of over 200 private companies.
- All 200 companies were running a wide variety of collective investment schemes (chit fund) throughout East India, especially in West Bengal, Odisha, Assam.
- Collapsed of Saradha Group in 2013 caused a loss of Rs 200-300 billion (1 billion=100 crore) to over 17 lakh investors.
- Enforcement Directorate (ED) has completed its investigation into the scam. Currently, Central Bureau of Investigation (CBI) has been probing the scam.
What is Ponzi scheme?
- Ponzi scheme is a fraudulent investment operation.
- An individual or organization (operator) invites investors to invest money into the scheme.
- Operator pays returns to its investors from new capital paid to the operators by new investors.
- Operators do not pay returns to investors from profit earned by the operator.
- Operators of such schemes usually entice new investors by offering higher returns than other investments.
- Investments in Ponzi scheme are done in the form of short-term returns that are either abnormally high or unusually consistent.
Who are main accused in Saradha scam?
- Sen was the chairman and managing director of the Saradha Group.
- Ahead of collapse of Saradha Group, Sen wrote one letter to CBI hurling serious allegations against suspended MP of Trinamool Congress (TMC) Kunal Ghosh.
- Sen wrote he had paid large sums of money to several politicians.
- He also stated that TMC leader Kunal Ghosh had forced him to enter into money-losing media ventures.
- Kunal Ghosh allegedly blackmailed Sen and forced him to sell one of his channels at below market price.
- After posting this letter to CBI on April 10, 2013. Sen fled from Kolkata.
- Later he along with two other aides was arrested from Kashmir.
- Currently, he has been lodged in a jail in Kolkata.
- She had joined Saradha Group as a receptionist in 2010. However, rose rapidly to be the number two in the company.
- She was one of the executive directors of Saradha Group who had the power to sign cheques on behalf of the group.
- She was arrested together with Sudipto Sen.
- Ghosh, suspended TMC MP was arrested by CBI in connection with the Saradha chit fund scam.
- He reportedly used to draw a salary of INR 1.6 million per month from Saradha Group. He was the CEO of the media group run by Saradha Group.
- He recently made demands before the TMC leadership to set up an internal probe committee within 72 hours to look into the role of others in this scam.
Trinamool Congress's connection with Saradha scam:
- After Kunal Ghosh, CBI on Sept 10, 2014 grilled TMC Rajya Sabha MP Srinjoy Bose. Bose was the CEO of Sangbad Protidin (Bengali newspaper). According to sources, Bose too is likely to be arrested.
- The CBI on Sept 9, 2014 also arrested former Director General of Armed Police, Rajat Majumdar, in connection with the scam. Majumdar is a powerful leader of TMC.
- CBI also questioned close associate of TMC leader Mukul Roy -- Asif Khan. A day after his interrogation by CBI, Khan resigned from his post in TMC.
- Earlier ED had interrogated popular actor Mithun Chakroborty. He is a TMC MP and was engaged as the brand ambassador of Saradha Group's media platform.
Mamata Banerjee's trouble:
- It has been alleged that Mamata Banerjee was aware of all dealings and misdeeds by Saradha Group.
- Kunal Ghosh and Srinjoy Bose were two close associates of the West Bengal CM.
- Recently, Ghosh claimed that CBI should summon Mamata Banerjee and interrogate her along with Sudipto Sen and Ghosh himself.
- Mamata Banerjee's controversial comments on Saradha scam:
- When the multi-crore scam came into limelight and made headlines nationwide, Mamata Banerjee created another controversy with her controversial statement.
- She was quoted as saying, "ja gechhey ta gechhey" (whatever has gone has gone).
- Later her government in West Bengal in 2013 announced a controversial Rs 500 crore relief fund for the low income depositors of the Saradha Group.
- Her government also introduced a 10 per cent additional tax on tobacco products to raise the money.
- Here she made another controversial statement. Her remark displeased anti-tobacco groups.
- The TMC supremo asked smokers "to light up a little more" to quickly fill up the requisite fund.
- Later former governor of Reserve Bank of India (RBI) -- R Subbarao raised questions regarding the propriety of the fund announced by Mamata Banerjee.