Saradha scam planned to skim investors: Probe | india | Hindustan Times
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Saradha scam planned to skim investors: Probe

The Saradha scam, which rocked the country through the past year, was startling in its intricate and well-planned design aimed at fooling the gullible public, a top government source with access to the voluminous report submitted last week by the SFIO told HT.

india Updated: Sep 16, 2014 01:47 IST

The Saradha scam, which rocked the country through the past year, was startling in its intricate and well-planned design aimed at fooling the gullible public, a top government source with access to the voluminous report submitted last week by the Serious Fraud Investigation Organisation (SFIO) told HT.

Last year the government launched a multi-agency probe into the activities of Kolkata-based Saradha group of companies in a scandal involving thousands of crores of rupees that has engulfed politicians, bureaucrats and media figures in a swirl of allegations.

In the report, the SFIO has named 14 companies of the Saradha Group — including their promoters, directors and managerial personnel — in connection with the ponzi scam where “the primary source of payment to subscribers was made from the collections made from newly enrolled members rather than from income generated from investments”.

Companies of the group which were declared by Securities and Exchange Board of India (SEBI) to be carrying out unauthorised ‘Collective Investment Schemes’ (CIS) will be prosecuted for violation of the SEBI Act instead of Section 58A of the Companies Act, 1956, as the former carries longer terms of imprisonment,” a government release said.

“It was a very ingenious, intricate and well-thought out scheme mainly in real estate and tourism to fool gullible people. It was carefully camouflaged through multiple layers so as conceal original beneficiaries and their criminal activities,” the official told HT on condition of anonymity.

HT had already reported on Friday that the government had okayed the prosecution process against those found guilty in the SFIO report.

Admitting that wild rumours without much basis were doing the rounds on the scam that cheated lakhs across West Bengal, Odisha, Assam and Tripura, the official source said the SFIO had pegged the scam at upwards of Rs 2,500 crore that mainly targeted small investors outside the pale of a formal banking network.

The SFIO report will now be shared with the CBI, SEBI, Enforcement Directorate (ED) and other agencies with interest in the case.