Chit fund company officials held in Durgapur

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In a major crack down, police in Durgapur raided the office of ‘MPS Greenery Development’ and arrested two officials from their Durgapur branch office yesterday (April 01). The additional chief judicial magistrate court (ACJM) has ordered seven days police remand for them.

Just a year ago in April last year thousands of citizens took to the streets across West Bengal protesting against the largest chit fund scam the country has ever witnessed. Some fuming, while others with tears rolling down their eyes were agitating against the Saradha group chit fund institution after the virtual collapse of the company in which they had invested their life’s savings.

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Alleged closeness and patronizing the Saradha Group by several Trinamool Congress leaders is believed to be the single biggest factor that lured the people of Bengal to invest in Saradha and other Ponzi funds that are close to Trinamool Congress. MPS Greenery, Rose Valley and Alchemist Group are the other three names which has close ties with the ruling Trinamool Congress. KD Singh, the Rajya Sabha MP of Trinamool Congress is the CEO of Alchemist group.

Several TMC leaders received financial support from Saradha Group, including several Trinamool Congress Members of Parliament. Trinamool Congress MP, Kunal Ghosh drew a salary of INR 1.6 million per month from Saradha Group. Trinamool Congress MP Srinjoy Bose, son of Swapan Sadhan Bose, was directly involved with the media operations of Saradha Group. Transport Minister Madan Mitra headed the employees’ union of Saradha Group, and publicly encouraged people to invest their savings with the company. Trinamool Congress MP Shatabdi Roy has been seen featuring in Saradha’s promotional material. Trinamool Congress candidate from Balurghat Lok Sabha seat in the upcoming Indian General Election was the executive director of the Saradha Group-owned channel “Ekhon Somoy” that did not go on air, but for which Ghosh drew a hefty salary.

Apart from Saradha Group the other two chit fund companies that have been under scanner of the market regulator SEBI for mobilizing fund under Ponzi scheme are MPS and Rose Valley. Several complaints have been lodged in several parts of Bengal against both the above two companies. But their alleged closeness with the ruling party made even registering a complaint in the local police station or drawing media attention not possible in several occasions.

In September last year, SEBI barred Trinamool Congress MP K D Singh owned Alchemist from raising any money from investors and asked them not to divert any funds or dispose any properties till further orders.

Mrs Anjali Chakraborty and Mr Mihir Baidyakar, two Durgapur depositors, complained that MPS Greenery Developers has not been refunding their sum, despite the completion of the three-year maturity term. They lodged separate complaints of cheating with the Durgapur police last Saturday (March 26).

The company has office is in the posh City Centre locality of Durgapur. The branch manager of the company, Mr Shubhraranjan Nath, and a marketing agent, Mr Santanu Sarkar, have been arrested.

Market regulator SEBI on 25 October last year (2013) ordered attachment of all bank accounts of MPS Greenery Developers in order to recover Rs 1,520 crore. Earlier in December 2012, SEBI had directed MPS to wind up its collective investment schemes (CIS) and refund the money collected with interest to investors within one month.

However the market regulator SEBI has received little or no help from the West Bengal government – in stark contrast to neighbouring Jharkhand, which clamped down on these companies using its police, based on information from SEBI.

MPS Greenery, against which Sebi has passed multiple orders, is planning to sell a 30 per cent stake in its food processing unit, confirms P Manna, chairman, MPS Greenery. Earlier, Sebi had ordered attachment of its holding in eight group firms for failing to refund Rs 1,520 crore with interest to investors.

However there have been serious doubts on whether arresting a branch manager and an agent of MPS Greenery Developers will do any good in refunding the money of the duped investors.

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