Mamata vs CBI: Know about Saradha Chit fund scam, Ponzi scheme which duped millions of investors

Saradha financial scandal was a multi crore financial scam which duped the economically poor citizens of West Bengal by falsly promising them huge financial gains in lieu of their investment made into the Chit fund. The group garnered funds to the tune of Rs 200 to 300 billion from millions of depositors before collapsing in April 2013.

Saradha Chit Fund

Kolkata: Hours after the Central Bureau of Investigation conducted a raid at Kolkata police commissioner Rajeev Kumar’s residence in connection with the Saradha scam, West Bengal CM Mamata Banerjee launched a scathing attack against the Narendra Modi-led NDA government for trying to resort to undemocratic and unconstitutional ways to run a parallel administration in the state.

The West Bengal Chief Minister has been sitting on a dharna in Kolkata since Sunday evening and is likely to be joined in by leaders of the opposition later in the day. The Central Bureau of Investigation (CBI) officials on Sunday were looking to probe Kolkata Police Commissioner Rajeev Kumar, who is alleged to have close links with Mamata Banerjee. The premier investigative agency wanted to probe Kumar in connection with the financial irregularities in the Ponzi schemes under the Saradha Chit fund scam case.

Kumar, a 1989 batch IPS officer, is considered close to Banerjee, and he had headed a SIT probe connected to Saradha and Rose valley ponzi scams before the case was transferred to the CBI in 2014 on Supreme Court’s orders.

Know all about Saradha financial scam, the Ponzi scheme which allegedly duped millions of investors

Saradha financial scandal was a multi crore financial scam which duped the economically poor citizens of West Bengal by falsly promising them huge financial gains in lieu of their investment made into the Chit fund. The group garnered funds to the tune of Rs 200 to 300 billion from millions of depositors before collapsing in April 2013.

Saradha Group, a consortium of over 200 private companies, had brought in notable personalities from all section of the society and had established strong ties with politicians. The group invested heavily in branding to make its schemes lucrative and appealing to the people.

Following the unearthing of the scam, the state government set up a Rs 500 crore relief fund for small investors who had put money in the scheme, to prevent them from going bankrupt.

After reports surfaced in the media about the scam, the Supreme Court transferred the case to CBI to probe into international money laundering, severe regulatory failures and political nexus surfaced.

From investing in football clubs like Mohun Bagan to sponsoring Durga Puja events, the group did everything to highlight its credentials  in the eyes of the people. Several political leaders from TMC received financial support from Saradha group and politicians from outside the state also benefited from the scam.

On April 23, 2013, Chairman and MD Sudipta Sen, along with Debjani Mukherjee and Arvind Singh Chauhan, were arrested from Kashmir.

After their arrest, SEBI asked Saradha Group to immediately stop raising any further capital and return all deposits within three months. In a written application, Sen confessed that several Trinamool Congress MPs were also involved in the scam. Apart from West Bengal, states which were affected by Saradha Ponzi scam were Odisha, Assam, Jharkhand and Tripura.