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Bengal depositors rage over chit-fund mess, look out for Saradha promoter

Kolkata, April 21, 2013 (IANS)

Thousands of depositors vented their anger across West Bengal Saturday by attacking offices of chit fund funded Saradha Group, which is virtually on the verge of collapse, even as police arrested a senior company official and issued look-out notice for its absconding promoter Sudipta Sen, froze his bank accounts and seized papers of his properties.

"We have alerted all terminal points including airports and issued a look out notice for Sen so that he may not flee the country," said Bidhannagar Deputy Commissioner of Police Arnab Ghosh.

"We have seized the papers of all the properties of Sen and frozen his bank accounts. We have also arrested Manoj Kumar Nagel - a director of one of the group companies," he added.
Widespread protests were reported across the state as irate depositors and the agents of the group hit the streets and even attacked many of its offices. There were incidents of clashes between the agents and the depositors who demanded their money back.


Lakhs of depositors, mostly poor people in villages and small towns, had put their hard-earned money with the company's chit funds lured by the promise of high interest rates. There were unconfirmed reports of an agent commiting suicide.

The opposition Communist Party of India-Marxist (CPI-M) and the Congress assailed the Mamata Banerjee government over the chit-fund mess and accused it of having a "very close relation" with such dubious companies.

"They used chit-funds for political intereststo come into power and to remain there," said Leader of Opposition Surjya Kanta Mishra, of the CPI-M. Mishra also alleged that the ruling party had used the print and electronic media under the Saradha Group for publicity.

The Saradha Group is one of the largest chit fund companies in eastern India. It has also diversified into construction, realty, tourism, hospitality, agri-businesses and media.
As capital market regulator SEBI and the Serious Fraud Investigation Office of the union corporate affairs ministry started taking action against chit fund companies for flouting rules, which raised concerns over safety of public money, pressure on the group's finances mounted.

Crisis in the group was brewing since January, which forced it to recently to wind up at least 10 media organisations - newspapers and television channels - that it had launched or acquired since 2010. Over 1,000 journalists and non-journalists have been rendered jobless.
The state Congress demanded Central Bureau of Investigation as well as SEBI probes into the group's money laundering case.

"The state government has very close relations with a few groups and people, and it stopped the government from taking appropriate actions at the correct time," said state Congress president Pradip Bhattacharya.

Denying the charges, Trinamool general secretary Mukul Roy put the blame for the mushrooming of chit funds on the erstwhile Left Front government in the state and the Congress-led UPA I government in New Delhi.

"These types of non-banking financial companies were constituted when the Left Front was in power in the state and the (Congress-led) United Progressive Alliance-I government at the centre," Roy said.

"But our government is very serious and the chief minister has said that all sorts of actions will be taken. As per my knowledge, the government is making arrangements to bring in a law," he said.

Facing severe public outrage, state Transport Minister Madan Mitra assured that his government would take "strictest" of actions against the companies for duping depositors.
Meanwhile, hundreds of agents and depositors of the Saradha Group Saturday demonstrated at Trinamool Congress' state headquarters.

A few days ago, the Banerjee government ordered the arrest of the group's chairman and managing director Sudipta Sen for defaulting on repayments.

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