All about the Saradha chit fund case that triggered CBI-Mamata row

Kolkata Police Commissioner Rajeev Kumar reached the CBI office in Shillong on Saturday to face questioning by the investigative agency for his alleged role in Saradha chit fund scam. Kumar arrived in the state capital of Meghalaya on Friday evening from Kolkata via Guwahati by road with three more West Bengal cadre IPS officers and his younger brother, an official said.

On Sunday, a team of CBI was allegedly roughed up and detained for a few hours when it went to question Kumar at his residence in Kolkata in connection with its probe into the Saradha and Rose Valley chit fund cases.

Following the face-off between the CBI and the Kolkata Police, West Bengal Chief Minister Mamata Banerjee launched a dharna to ‘save democracy’ that lasted 45 hours.

The Supreme Court, while hearing the matter on Tuesday, directed the Kolkata Police Commissioner to join the CBI probe at a neutral place, in Meghalaya’s capital Shillong.

When was the Saradha scam uncovered

The Saradha group scam began to unravel in the first quarter of 2013 when investors demonstrated in front of the Trinamool Congress office demanding the government take action against the group’s officials for defaulting on payments. It finally blew up in April 2013 when the chairman of the group that ran the ponzi scheme, Sudipta Sen and the company’s executive director Debjani Mukherjee, were arrested from J&K after a chase for a few days across north India during which they kept travelling in an SUV.

They were arrested along with driver Arvind Singh Chauhan from Sonmarg on April 23, 2013. The arrest warrant for Sen was issued on April 13.

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What exactly is the fraud

Saradha group operated through a network of more than 100 companies and several thousand agents arranged in a pyramidal structure who were encouraged by commissions that ranged from 25-40%.

The design operated with the name — Saradha, the name of Ramakrishna Paramhamsa’s wife and spiritual partner evokes deep respect among millions in Bengal.

Armed with a name that lent an immediate respectability among the masses, Sen began to sell secured debentures and preferential bonds but did not conform to the guidelines of the market regulator SEBI or seek its permission to float the schemes.

After 2010, Saradha group companies began offering collective incentive schemes and investors never knew about where their money was invested. They were simply promised high returns on their money after a fixed period.

By 2012, SEBI instructed the group to stop all schemes till the authorities obtained their nod. However, Sudipta Sen continued the business till the collapse in 2013.

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How many people were cheated

About 1.7 million to 1.8 million depositors — mostly poor and lower middle class people — lost their money. They were lured by the promise of high returns that an army of thousands of agents in a pyramidal structure sold in the market.

The deposits were raised primarily from West Bengal, Assam, Jharkhand, Odisha and Chhattisgarh.

The kingpin of the scam

Sudipta Sen, who was in his mid-fifties at the time of his arrest in 2013, was the kingpin of the scam. Also arrested with him was Debjani Mukherjee, the executive director of the company, who was in her mid thirties in 2013.

While Sen was supposed to have been involved in real estate deals earlier. Mukherjee was a student of an English medium school in Kolkata.

Soft-spoken Sen is believed to have changed his name from Shankaraditya. It is also rumoured that he underwent plastic surgery in the 1990s to engineer a total makeover and identity.

Incidentally, only Sen and Mukherjee are still behind the bars. Others are out on bail.

High profile arrests

The Saradha scam generated great controversy since several leaders of ruling Trinamool Congress were allegedly involved with the scam. Those arrested include Madan Mitra, sports and transport minister in Mamata Banerjee cabinet, who was nabbed on December 12, 2014. He was released on bail on September 9, 2016.

Incidentally, he was the first incumbent minister to be arrested in the state.

The other prominent Trinamool faces to be arrested were Rajya Sabha MP Kunal Ghosh, who also headed the media ventures of Saradha group and another Rajya Sabha MP Srinjoy Bose.

Party vice-president and former police officer Rajat Majumdar was also arrested.

Debabrata Sarkar, an official of East Bengal football club, was also arrested.

Police Commissioner’s role

Rajeev Kumar, Kolkata Police commissioner now, is a 1989 batch Indian Police Service (IPS) officer who was the commissioner of Bidhannagar City Police when he was aksed to head a special task force to investigate the Saradha scam.

As soon as the Saradha scam came to light in April 2013, Mamata Banerjee set up the SIT Kumar.

It was as the SIT chief that Kumar has come under the CBI’s scanner. CBI, alleged that the SIT had seized various items from Saradha’s Midland Park office in Salt Lake, including a red diary and a pen drive containing details of pay-offs to influential people.

Moreover, CBI had also alleged that it did not get all the cellphones and a laptop that Sudipta Sen had with him when he was arrested from J&K in April 2013.

Former Saradha executive director Debjani Mukherjee too, allegedly told the CBI that these documents were seized but the CBI said the same were never made available to them.