- Mansi Tiwari
- Shri Vaishnav Vidyapeeth Vishwavidyalaya
Abstract
The Saradha Group was a conglomerate based in West Bengal, that operated a chit fund scheme promising high returns to the investors. The company attracted investments from thousands of people, particularly from rural areas, by promising high returns on their investments.
Facts
The scheme was launched by Saradha Group in 2000’s which aimed at providing high return to the investors. The scheme marked a very significant place in the market, because of its high interest rate. The money was collected by thousands of people as an agent of the company, who gets over 25 %commission for their work. The company used various types of marketing tactics to build its brand name and it resulted in attracting so many people as well as celebrities also. The company soon expanded its business to Odisha, Assam and Tripura and over 1.7 million people became investors of the company. There were also so many politicians of then the time who also worked for the company either directly or indirectly.
The real face of the scheme was seen when the Security Exchange Of India
(SEBI) asked the company to take prior permission of the regulators before accepting any investment. And this order by the SEBI proved to be a major step in revealing of the company’s true status. In 2013, it was known that the company’s inflow was lower than its outflow, which caused a major hue and cry in the market and by the end of the April 2013 the company collapsed making so many people wrecked and the people lodged complaint against the company. The investors were also felt betrayed and they also tool a legal step against the company.
Proceedings:
The then West Bengal Government immediately set up a Special Investigation Team (SIT), Rajiv Kumar the then Kolkata Police Commissioner as its head. Later on, the Supreme Court transferred the case to the Central Bureau of Investigation (CBI). The CBI founded in its probe that the Rajiv Kumar was also involved in the embezzlement of the documents relating to the case. The government of West Bengal announced a 500 rupees crore relief fund for the low-income investors of the Saradha Group. And around 6 officials were arrested from Saradha Group. Further all other major role paying persons in the case was also arrested for their acts.
Conclusion
The Saradha Chit Fund case is one of the most infamous cases of the India and t makes the government to think and frame its administration by keeping in the view of the surrounding happenings otherwise this type of situation will arise in the future and the result will always be same.
