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Saradha Chit Fund Scam
Saradha Chit Fund Scam
HEMANT PRAJAPATI-2428
SYBMS(FINANCE)
INTRODUCTION
Collective Investment schemes like tourism packages, real estate fund launched in
the name of chit fund.
In 2011, SEBI warned west Bengal government about the alleged schemes of the
company as the concept of chit fund is regulated by State Governments and not
by SEBI.
In 2012, SEBI identified that the group operated CIS and not Chit Fund.
Saradha Group started trading in stock market and siphoning off the proceeds.
Saradha Group had several branches in West Bengal, Jharkhand, Assam, Odisha,
Chhattisgarh and other state to get public deposit.
Scam summed up to Rs.2460 crore and about 80% of money still unpaid to depositors.
They used three scheme namely monthly income deposit, fixed deposit and recurring
deposit.
On 7th December 2012, RBI governor stated that the West Bengal government
should initiate suo motu action against companies which were indulging in financial
malpractices.
Sudipto Sen, wrote a confessional letter to CBI in April 2013 and fled. He was later
arrested.
PIL was filed on 22nd April 2013 in Guwahati High Court and Calcutta High Court.
On 24th April 2013, Mamata Banerjee announced a controversial Rs500 crore relief
fund for the low income depositors of the Saradha Group.
In the light of the scam, SEBI requested sweeping powers to investigate and
prosecute and fraudulent collective investment schemes.
On 7th May 2013, Calcutta High Court appointed a three member administrator
group to run Tara News and Tara Muzic
CBI INVESTIGATION
As per Supreme Court’s order Bengal SIT handed over all arrested suspects
including Sudipto Sen, Debjani Mukhopadhyay, Kunal Ghosh over to CBI.
CBI arrested West Bengal Transport minister Madan Mitra on the charges of
criminal conspiracy, cheating, misappropriation and deriving undue
financial benefits from the Saradha Group.
PUNISHMENT
He was convicted under Section 406 (criminal breach of trust) for not
depositing the provident fund of employees, an offence Sen confessed to
before the court. He was also sentenced to three years’ imprisonment for
’conspiracy’ under Section 120B of the IPC in connection with the PF
default.