Much before the Saradha chit fund scam came to the fore, as early as October 8, 2012, the Intelligence Bureau had written to the government about the illegal financial activities of chit fund companies. The Joint Intelligence Committee (JIC) and the National Security Council (NSC) were also informed.
The IB had reported "fresh" illegal financial activities of chit fund companies and multi-level marketing schemes that were cheating lower middle class and poor people, especially from rural and semi urban areas.
Of the four firms named, two companies - Rose Valley Estate Construction Ltd, Kolkata and MPS Greenery Developers Ltd, Jhargram are in West Bengal.
The intelligence agency wrote that till March 2010, Rose Valley had collected Rs 1,200 crore for a plot allotment scheme called 'Ashirbad', while MPS Greenery had collected about Rs 1,100 crore from schemes such as agro bonds and teak bonds which promised high returns.
"Their financial statements are a total mess. No details of either secured or unsecured loans or available funds are mentioned. In March 2011, MPS Greenery had reserve surplus of more than Rs 650 crore and unsecured loans of Rs 900 crore," a top government source said on the condition of anonymity.
The IB report also detailed fraud schemes of two more companies - the Nashik-based More Group's Ardent Square scheme and the ponzi schemes of the Falkon Group operating in Daman and Diu.
"Huge amounts were collected for the Ardent Square scheme on the pretext of investing in the More Group of companies which promised to double investments in 22 months. On the other hand, the Falkon Group, operating across Silvassa and Dadra Nagar Haveli, promises gullible people of doubling their investments in five years through Secured Redeemable Debentures (SRD)," the source added.
Interestingly, while Falkon advertises that the SRDs are open only for promoters, employees, shareholders, friends, referrals, etc... it had been raising funds from the general public too.
With rising suicides by depositors and agents of Saradha Group being reported, a hassled government is looking for ways to curb the growing menace.
The government has made a move to appoint a permanent body headed by the additional secretary, banking and financial services, and comprising about seven joint secretary level officers of concerned departments and regulators to monitor illegalities.