Saradha chit fund scam is one of the biggest scams in India. It was a Ponzi scheme which had left a significant impact on the society and led to many suicides and breakups due to duping of common man.
The scam was started by Kaushal Majumdar, who is an entrepreneur based in Kolkata. He had launched a non-banking finance company named “Saradha Group” in 2011. At that time he raised money through illegal means such as selling land property and jewellery etc., which helped him bring in huge amount of funds within few months.
This company later merged with another company named “Saradha Finance” under whose name the entire operation took place which led to various allegations being made by people who were duped using their hard earned money by this fraudster who operated from Kolkata
The Saradha Group was formed by Sudipta Sen in November 2008. The company was formed with the help of Kunal Ghosh and P Suvendu Adhikari. It had no business activities, assets or income at that point of time. However, it did have money in its bank accounts which were held by many persons including Kunal Ghosh, P Suvendu Adhikari and others who supported him during his initial days as promoter of this new firm.
This money was deposited in several different accounts belonging to other people like Bimal Gurung (a businessman), Indranil Sengupta (head of some companies related to Saradha Group) etcetera
These accounts were used to collect money from investors who wanted to invest in Saradha Group. The company issued debentures and bonds worth Rs. 250 crore to investors who either did not want to invest directly or could not afford to do so. After collecting this money, Saradha Group started operating its business which was basically providing financial services such as insurance, deposits and investments etcetera
It also started an investment scheme called ‘Sahara India Real Estate Corporation’. This scheme was launched by the company in 2009 when it announced that it would invest in real estate projects across the country and give returns to investors on their investments over a period of time. However, this scheme turned out to be a fraud and people who had invested in it lost all their money as many of Saradha Group’s projects were unsuccessful.
This led to the downfall of Saradha Group and it came under serious scrutiny by various agencies such as Enforcement Directorate, Serious Fraud Investigation Office etcetera . The group was accused of cheating investors by collecting money through illegal means. The Income Tax Department also launched an investigation into this matter and found that all these companies were not registered with the Securities Exchange Board of India (SEBI).
The investigation revealed that the group had collected around Rs. 2, 500 crore from investors through illegal means. It was also found that the company was collecting money under various schemes such as chit funds, real estate projects etcetera . The investigations also showed that Saradha Group was involved in illegal activities like money laundering and tax evasion.
When did the scam come to light?
The Saradha scam first came to light in 2012, when the Kolkata police raided the Saradha office and found that it had been misusing funds for personal gain. The case was transferred to the CBI in 2013.
The CBI filed a charge sheet against Sudip Roy Burman and Rekha Debbarma in 2014, accusing them of defrauding investors of over Rs 13 billion ($1 million). The court has since been hearing this case, but there are still many unanswered questions about how much money was taken from investors and where it went.
The scandal has put a spotlight on the fact that investors in India are often unaware of where their money is going or how it will be used. Many companies fail to disclose this information, leaving people unable to evaluate whether they should trust them with their savings.
The Saradha scam revealed that many of these companies are based in West Bengal, where they are sometimes politically connected and able to evade scrutiny. The case is still ongoing, with the trial still in its pre-trial stage.
If you are an investor in Saradha Group, it is important to know who was involved in this scam. Here are some names that you should know:
- Sudipta Sen (chairman of Saradha Group)
- Debjani Mukherjee (Managing Director of Saradha Group)
- Kunal Sen (CEO of Saradha Group). He is also known as “Kunal Kurukshetra”.
- Amit Mitra (CFO of Saradha Group).
Other people who were arrested include a former union minister, as well as several politicians from West Bengal. The Saradha scam also led to a political crisis in the state because many senior leaders were accused of having accepted bribes from Sudipta Sen.
How was the company launched?
Sudipta Sen, chairman of the Saradha Group and its flagship company Saradha Chit Fund Ltd., was an active businessman who started his career in 1976 as a graduate from Indian Institute of Technology (IIT) Kharagpur. He is also known for having founded a number of other businesses including Sealdah Bank Limited, which later merged with the State Bank of India to form SBI; and Embassy Hotels & Resorts Pvt Ltd., which operates hotels across India under the Embassy brand name.
In 2007, Sudipta launched the first phase of his plan—to build a financial empire based on chit funds (collectively referred to as “chit funds” or “chitties”). These small savings schemes were popular during colonial rule but fell out of favor after independence because they were seen as unsafe investments with high risks involved in them due to high interest rates charged by moneylenders at that time
What are chit funds?
A chit fund is a form of savings and investment scheme. It is an alternative to banks and other financial institutions in India, which offer different types of savings schemes like bank accounts, mutual funds etc.
Chit funds are also known as collective investment schemes or mutual funds that pool money from individual investors for the purpose of investing in stocks, bonds etc., with a view to generating returns in future years.
They are also called as chit funds or chitty fund, they are usually registered with the Registrar of Companies (ROC) under the Indian Companies Act, 1956. The investors in a chit fund can be individuals or companies, but the latter is not very common.
What was done with the funds raised?
Saradha’s activities included the funding of political parties and individuals, who were known to be connected to the company. The money was used to pay off politicians and influential people in order for them to keep quiet about it.
The funds were also used to acquire properties in West Bengal, such as resorts and hotels; these are now being auctioned by the government at exorbitant prices after investigations revealed that many people had invested their money in these properties through Saradha’s Ponzi scheme.
The company is known to have had at least 17 lakh depositors who lost their money in the scam. Saradha was also alleged to have paid off some journalists, who then wrote positive articles about the company. The whole operation was masterminded by Sudipta Sen, a former accountant who used his knowledge of financial markets to dupe people into investing in Saradha’s schemes.
The scam was exposed in 2013, when the police arrested Sudipta Sen and many other people who were connected to Saradha. Investigations revealed that the company had duped millions of people across West Bengal and Assam into investing their money in its schemes. Sen also allegedly used some of this money to pay off politicians and influential people in order for them to keep quiet about it.
The company had been in operation since 2009, and it was only when the investors started asking for their money back that it came to light that Sudipta Sen had fled to Kashmir after the scam was exposed. The CBI has now arrested several people who were connected with Saradha, including Sudipta Sen’s wife.
Who were affected by the scam?
The Saradha chit fund scam affected people from all sections of society. The common man was the most affected, as he was duped in the name of chit funds. But this did not happen only to poor people; even those who were educated and had jobs were targeted by these fraudsters with ease.
The middle class also suffered due to this scam as it involved companies that claimed they could help you buy real estate properties at low rates but in reality they made money without doing anything useful for you or your family members at all!
The common man was the most affected, as he was duped in the name of chit funds. But this did not happen only to poor people; even those who were educated and had jobs were targeted by these fraudsters with ease.
Saradha Chit Fund Scam had left a significant market impact and led to many suicides and breakups due to duping of common man. The scam case was reported in 2012 and then came into limelight again when the CBI filed an FIR against some accused persons under Section 109 of IPC (criminal conspiracy) on July 29, 2014. The case is pending since then in various courts across India.
Saradha Chit Fund scam has been investigated by CID-CBI as well as Directorate General Anti-Corruption Bureau Delhi Police STF etc., who were assigned with investigating this case
The scam was first reported in 2012 by the media, who broadcasted that Saradha Group of companies are collecting money from people through chit funds and not returning the invested amount back. Subsequently, there were reports of several high-profile politicians being linked to the scam. On April 18, 2013 CBI registered a case against Sudipta Sen, chairman of Saradha Group of Companies under sections 120 B of IPC (criminal conspiracy) and 420 of IPC (cheating).
The Saradha chit fund scam is one of the biggest scams in Indian financial history. It had left a significant market impact and led to many suicides and breakups due to duping of common man.