Bengal chit-fund scam victims await justice as probe turns political slug-fest

Many politicians have been linked to these scams, turning the probe into political fracas. Neither ruling Trinamool nor the Centre has shown any urgency to bring relief to millions of victims

Rose Valley scam, Saradha chit fund scam and others have duped investors of crores of rupees as per Enforcement Directorate’s estimates. Representational image: iStock

Mahadev Mandal was barely managing to look after his family comprising an ailing father, an ageing mother and two younger siblings with his meagre earning from tuition as a science teacher.

Then suddenly in mid-2010 his life took a turn. Mandal started earning enough for a decent living of his family, or so he thought.

It was around that time in the neighbourhoods of Baraipur, where Mandal lives, almost every second or third house had what was then believed rags-to- riches story.


Stories were abounding about a certain tea shop owner or a roadside mechanic or a vegetable vendor becoming rich overnight earning ₹ 1.5-2 lakh in a month and in some cases even more.

All of them were associated with one or the other chit-fund companies that had been flourishing in West Bengal.

Allured by the prospect of sudden prosperity, Mandal became an agent of the Saradha Group, a consortium of over 200 companies that were running various “ponzi schemes” in several states in eastern India. He was getting 25 per cent commission on the money collected form depositors. Based on “performance”, the commission could increase even up to 40 per cent.

Those who could not become an agent, queued up to become a depositor as the companies were promising astronomical returns on their investment.

Then one morning in April 2013, the dream came crashing down following the collapse of Saradha Group that had by them amassed about Rs 2,500 crore from 17 lakh depositors in West Bengal, Odisha, Jharkhand, Assam and Tripura.

Mandal had to go into hiding to escape the wrath of the devastated depositors after the ponzi scam, popularly known as chit fund scam, broke out.

Since then he has been living a life of a fugitive just like many other agents of these chit-fund companies, while many depositors, who had lost their life savings, either committed suicide or have been living in penury.

The Rose Valley scam that followed the Saradha chit fund scam duped investors Rs 17,520 crore as per Enforcement Directorate’s estimates. Besides, there are many other chit-fund scams currently being investigated by the Central Bureau of Investigation.

Also read: LS approves bill to raise monetary limits for chit funds

Political fracas

Several influential politicians have been linked to these scams, turning the probe into the irregularities a political fracas with neither the Trinamool Congress-led state government nor the BJP-led Central government showing any urgency to address the plight of millions of victims.

As in past elections, the scams are again in political focus ahead of the ensuing assembly polls in the state.

“We have become a pawn in the political battle. Neither the state government nor the Centre is actually serious about returning the money to the depositors,” said Mandal.

All Bengal Chitfund Sufferers Welfare Association (ABCSWA) on Wednesday (February 10) took out a rally in Kolkata to draw the attention of both the governments towards their plight.

The association sent a memorandum to the state and the Centre demanding that steps be taken to return the money of the depositors.

“We will launch a bigger agitation if our demand is not met,” said president of the association Rupam Chaudhary.

Had the governments been more cooperatives, it would have been easier to expedite the process of returning money to depositors, observed Arindam Das, the lawyer of cheated investors.

High Court order

In September last year the Calcutta High Court had directed the West Bengal government to provide all support to the HC-appointed Justice SP Talukdar-led committee on ponzi cases to make it fully functional at the earliest.

The committee was appointed by the High Court in December 2015 to create a corpus by selling properties, both movable and immovable, of the chit fund companies and their directors by public auction and frame a proper scheme for paying the amounts due to the investors.

Recently, the committee started disbursement of up to ₹ 5,000 to depositors of the chit fund company Vibgyor.

Assets of the company would be auctioned to return the money of those who had deposited more than ₹ 5000 with the company, said Das.

There are around 52,000 depositors who lost money investing with the Vibgyor group.

Similar process of retuning money to the depositors of Alchemist chit-fund group who approached the court before 2017 has also started.

Earlier, the West Bengal government formed Shyamal Sen Committee to look into the Saradha chit-fund case. The state government earmarked ₹ 500 crore to be disbursed among the victims. Accordingly ₹ 251 crore was disbursed, but out of which cheques worth ₹ 102 crore went to wrong addresses.

After the CBI took over the case, the state government wrapped up the committee in 2014.

The CBI sources said the agency is close to filing a final chargesheet in the multi-crore Saradha ponzi scam.

With some influential politicians accused of being involved in the chit-fund scams are now entrenched in the BJP, depositors fear their wait for justice will only be longer, that is, if at all they get justice.

Also read: Mamata fumes over MHA summons to IPS officers, says Centre crossing limits

Get breaking news and latest updates from India
and around the world on