SARADHA SCAM OF WEST BENGAL

 

The Saradha group was established in the year 2006 under the name of Ramakrishna Paramahamsa’s wife. Sudipto Sen was Chairman and MD of the Saradha group. The land bank he formed in the year 2000 on account of his activity in land development became an attraction for attracting investors to his Ponzi Scheme.

The group promised huge returns on the amounts invested in Chits. They employed agents to sell the scheme in rural areas and 25% to 40% of the deposits were paid as commission to the agents. Initially, they collected money through secured debentures and redeemable preferential bonds. In doing this it already violated the Indian Security Regulations & the Companies Act.

SEBI confronted the Saradha group in 2009. Then the group adapted by opening 200 new companies to create cross holdings, create confusion and confound SEBI. SEBI persisted on in its investigation in 2010. The group then changed the way it raised capital and used collective investment schemes of Tourism packages, forward trading, hotel booking, timeshare credit transfer, real estate, infrastructure finance and motorcycle manufacturing. Investors were simply promised high returns and were totally unaware of the modus operandi of the company.

It also started raising funds through Chit Funds. SEBI warned the West Bengal government about its Chit Fund activities in 2011. This reporting made the Sardha group to change its methods. It bought and sold large number of shares of listed companies and embezzled the amounts  which could not be identified. It also started laundering a large proportion of its funds to Dubai, South Africa and Singapore. By 2012 SEBI could catch that the money is obtained from collective investment rather than for Chit Funds and directed the Saradha group to obtain permission from SEBI for its activities. The group simply ignored it and operated its schemes till its collapse in April 2013.

Earlier, with huge amounts of money at its disposal, it went on to build its image in the public eye by investing in the Bengali film industry and then by recruiting TMC MP Stabdi Roy as brand ambassador and also TMC MP Mithun Chakravarthy. Kunal Ghosh another TMC MP, Kunal Ghosh was made the CEO of its media group. Under him 1500 journalists were recruited and 8 newspapers were printed in 5 languages. Author Aparna Sen was made the editor of Parama, a Bengali weekly brought out by the group.