One in 20 Indians duped of savings by dubious firms | india | Hindustan Times
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One in 20 Indians duped of savings by dubious firms

india Updated: Apr 18, 2016 08:35 IST
Abhishek Sharan
Abhishek Sharan
Hindustan Times
Ponzi schemes

Once the compliance window closes, anyone found having undeclared overseas wealth would be required to pay 30% tax, 90% penalty and face criminal prosecution. (File photo)

More than six crore Indians — or nearly one in every twenty people — have been victims of financial fraud totalling an estimated Rs 1.2 lakh crore over the last 20 years, the Central Bureau of Investigation (CBI) estimates as it attempts to unravel the rackets run by more than two dozen firms.

The scams —run as ponzi schemes or chit funds — have usually targeted tier II and III cities where they lure unsuspecting investors with ‘money-multiplier’ schemes.

Aastha Group, for instance, promised investors in Odisha a return of Rs 60,000 on an investment of Rs 20,000 in four years.

The bulk of the frauds have been allegedly perpetrated by two Pearl Group firms — PACL and PGF Limited — that the CBI began probing in February, 2014. The group is estimated to have robbed 5.5 crore people from at least seven states (Punjab, Haryana, Madhya Pradesh included) since it began operations in 1996. Deposits worth Rs 51,000 crore are estimated to have been swindled away.

The rest of the victims, more than 56 lakh, were cheated by more than 22 firms active in India’s east and north-east, which are also under the CBI’s scanner.

Among these, Saradha, Rose Valley, Artha Tattva, Aastha and Seashore Group have been the bigger players. Saradha and Rose Valley together are suspected to have duped around 20 lakh people of Rs 15,000 crore to Rs 17,000 crore each.

But three years since Saradha’s chairman Sudipta Ghosh’s admissions blew the lid off such scams in April 2013, there is no relief in sight for a significant section of the victims.

A move to seize and sell properties of Pearl Group firms to refund investors may take months to begin and the 56 lakh victims of other firms may not even get such remedy.

The SC-constituted panels are not dealing with refunds to non-Pearl Group victims and the CBI on its own has not initiated any such process, a CBI source said.

“Issues such as refunds lie in the domains of courts and governments,” a CBI source said. 

  • A remedy for the crores duped by groups like Pearl, Saradha and Rose Valley, appears to be a pipe dream
  • Three years after Saradha went bust, Bengal chief minister Mamata Banerjee announced a Rs 500-crore relief fund to compensate the scam’s victims.
  • In November 2014, the government realised that it cannot legally return money exchanged between an individual and a private financial agency from the state’s treasury
  • In 98% of the 76 –odd FIRs registered by CBI into such frauds since Feb 2014, trials are yet to begin. Move to seize and sell properties of Pearl Group firms may take months to begin.