Chit fund scam consumes Odisha

The recent chit fund scam in Odisha, as can be expected, has hit the small and poor investors the hardest.

For nearly a month since the multi crore scam came to the fore, these investors have been holding demonstrations and rallies almost every day in different places across the state demanding the return of their investments.

They insist that the state government should create a special corpus fund and pay back the money they had invested in the tainted chit fund companies. They have also been demanding stringent possible action against the chit fund owners as well as powerful people backing them. However, there are other sections of people who have supported the small investors’ second demand but have strongly opposed the first one. According to them, there is no need for the state government to create the corpus fund by releasing tax payers’ money as those who had invested in the chit funds had done so voluntarily out of greed to get more returns in quick time.

The chit fund scam surfaced in Odisha the wake of a similar chit fund scandal in the neighbouring West Bengal. When investors, after they came to known about the developments in the neighbouring state through TV channels and newspapers, rushed to the chit fund companies to know about their investments, they found to their horror that the firms vanished overnight closing their offices.

Unearthed irregularities

Before these recent developments in the two states, Odisha’s crime branch had already unearthed irregularities in at least two chit fund companies operating in the state who had duped the investors of crores of rupees. The owner of one of these tainted chit fund companies, a small time Bollywood actor-producer, was even arrested and was subsequently released with the court’s intervention. These two cases had received wide coverage in the local media. Therefore, it will be wrong to believe that the investors were not aware of the risk involved in investing in chit fund companies, those who oppose the demand for creation of the corpus fund maintain.  

 During a public demonstration held in the capital Bhubaneswar recently, an investor was heard saying that he decided to invest his money in a particular chit fund company after seeing the pictures of the company owner with a few state ministers at a public function organised by the his firm. This perhaps is not a valid argument. 

This particular non-banking finance company (NBFC) which is already under crime branch investigation had expanded its business in different sectors including media with the funds it had generated from the public offering lucrative investment schemes. An Odia TV news channel run by this company has already closed its shutters.  

Those who are against creation of the corpus fund also feel that instead of accepting the investors’ demand, the state government should come out with a proper mechanism to create more awareness among the people and advise them not to invest their hard earned money in tainted chit fund companies.

Apart from small investors, the ‘agents’ of the chit fund companies too have been suffering a lot following the scam. These agents are mostly unemployed local youths who had been lured by the chit fund companies with attractive and handsome ‘commissions.’ Unable to tolerate the pressure and humiliation from the investors, at least three agents have already committed suicides in different places. In another case in a coastal district, an agent had reportedly been beaten to death by angry investors.

Again as expected, the scam has opened the field for political parties to make maximum capital out of the development, especially when the elections are less than a year away. The Congress and the BJP, two principal opposition parties in the state as well as other smaller political parties have demanded a CBI probe into the scam alleging involvement of state ministers and senior leaders of the ruling Biju Janata Dal (BJD).

The BJD government, on its part, has announced a judicial probe into the scam by a sitting judge of the Orissa high court besides the ongoing investigations by the crime branch as well as local police in different districts. The leaders of the ruling regional party have said that if the opposition parties have concrete evidence and proofs against any minister or BJD member they can submit them in the form of affidavits to the judicial commission. “The crime branch and the CBI can be influenced (by politicians). But it is certainly not easy to influence a sitting high court judge,” quipped a senior state minister.