If you owned half a dozen newspapers and television channels in Kolkata, you would be counted among the city’s social elite.
If you built a business empire that grows into 160 companies and tens of thousands of crores in revenues in just five years, you would make headlines. You would be known in the corridors of power.
Sudipta Sen was none of that, until the Saradha Group of companies he founded in 2008 went bust earlier this month, risking the lifetime savings of lakhs of small depositors across eastern India, leaving thousands of people jobless and unraveling a murky web of deals involving money marketers, politicians and journalists.
Sen was arrested on Tuesday from a resort hotel in Sonmarg in Kashmir, days after fleeing Kolkata where the police had issued orders of his arrest on a complaint against nonpayment of salaries to staff at one of his media companies.
Shortly after his arrest, Sen wrote an 18-page letter to the Central Bureau of Investigation, providing little-known details on his businesses and people he cut deals with.
The disclosures made in the letter, leaked to the media, have since triggered a political controversy that heightens the growing disenchantment among people about Bengal chief minister Mamata Banerjee and her party.
It also exposes the cracks in India’s regulatory architecture that is not equipped to prevent such systematic financial swindle of savings of gullible depositors.
Loot, plain and simple
At the core of the crisis is a multi-level-marketing scheme — akin to a ponzi scheme — with which Sen lured small depositors in rural areas and used that money to expand his business beyond realty to education, automobiles and the media, among others.
For the past five years, Sen had been on a roll. The MLM scheme from his flagship company, Saradha Realty, enrolled thousands of sales agents across West Bengal, Assam, Jharkhand and Odisha, helped open 300 offices in these states and brought in more than Rs.22,000 crore in deposits.
The easy money also brought with it all the vices it does. By Sen’s own admission, his agents were illiterate and “they only understand money, women and wine and these are their major demands.”
So he filled his ranks with young women, scores of them -- mostly from lower middle and middle class families.
Two floors of the seven-storied Midland Park headquarters of Saradha Group in Salt Lake in Kolkata, housed only women employees.
Some of them were promoted to senior executive positions in short time, sometimes in months. They were his eyes and ears.
One such person was Debjani Mukherjee, an airhostess by training who rose from the rank of a receptionist to that of a director in three years.
She was Sen’s shadow and the number 2 in the pecking order of Saradha Group. She was arrested along with him.
Such an operation, which had no sanctity and violated the law in many respects, needed social and political protection.
That is why Sen turned to investing in the media. His first pick was a Bengali television channel, Channel 10, which came to be the mouthpiece of Trinamool Congress in the run-up to the 2011 elections.
Until it shut down earlier this month, senior Trinamool leaders would routinely appear in its shows. With their participation came Sen’s proximity to the powers that be.
According to Sen, journalists Kunal Ghosh and Srinjay Bose, who now represent Trinamool in Rajya Sabha, helped him in his media foray.
In 2010, Sen launched an English newspaper (The Bengal Post), a Bengali daily (Sakaalbela) and a Urdu daily (Kalom).
Journalists from rival papers were hired from rival publications with generous salary hikes — often twice or more than what they were previously making.
That was, perhaps, the first time, Kolkata came to know of Sudipta Sen. Yet, few had had a chance to meet or see him till date.
A fraudster’s style
Sen maintained a very secretive and obscure style of functioning. He never allowed his photographs to be published in newspapers or aired on any of his television channels.
Even the journalists who had an opportunity to meet him never got to know much about the man.
Except that he was a stocky man in his early fifties who spoke broken English and often wore shiny white or blue suits that were badly cut. That he often was surrounded by men who looked like criminals.
That he had a fetish for getting the office walls painted in shades of orange and cream, adorned by pictures of Ramakrishna Paramahansa, the 19-century Hindu revivalist, and his much-reverred wife Maa Sarada after whom Sen named his companies.
Ironically though, Sen did everything but confirm to the ideals of Maa Sarada.
In the end, he was done in by the monsters he created on both sides — the greedy marketing agents who moved out of his control and the unviable media business.
He also claims to have been blackmailed by powerful people with whom he got entangled because of his foray into media.
In his letter to CBI, Sen provides details of how some of his trusted aides who helped him build the chit fund empire had betrayed him, how they had put in place a software over which he had no control and how the brokers had begun pocketing the money they were raising in the name of Saradha.
The first sign of trouble surfaced last November when some agents found it difficult to meet redemption demands.
“My overall business downfall is due to the media entry, extortion from the above-named persons and blackmail by my own staff and executives,” Sen wrote in the letter to CBI that named several powerful personalities in Bengal’s politics and administration.
* The shadowy bundle of contradictions
Sudipta Sen, chairman and managing director of Saradha Group, burst into our lives on June 15, 2010, when we joined The Bengal Post.
We were told he was fabulously rich, with interests in real estate, tourism and even mines in Australia and South Africa, and was now ready to invest in media.
There was not a hint of his multi-level marketing – loosely called chit fund -- operations.
Now that the bubble has burst, several things are falling into place. But Sen remains an enigma.
The most important question still unanswered is whether he was a Ponzi king or a fool led by unscrupulous politicians and crooks.
Sen knew he was on the wrong side of the law and liberally doled out money to get protection. But we may never know the full story, considering the games to be played out when his letter to the CBI is investigated.
His background has always been shadowy. Nobody knew about his roots although a Bengali ‘gentleman’ with that kind of money would be well entrenched in the Kolkata social circuit.
As an employee of The Bengal Post, I never saw him interfering in policy matters – except one rider that the Trinamool Congress must never be criticised.
One more decision that surprised me was his furious reaction to front page advertisements of other companies.
He wanted only his companies to occupy that space. Now, it seems that he wanted to impress his investors and agents with those ads.
Ironically, Sen who is making headlines now, preferred to be in the background and let his minions hog the limelight.
He was even timid when it came to showing off his wealth -- possibly as they were ill-gotten -- but knew very well that money talks.
Sen himself was far from the confident business tycoon. He was so badly dressed that I was shocked the first time I saw him in our Delhi office.
He was nervous, fiddling with the three cell phones that he carried, and seemed in a hurry to get over the meeting.
He was with three or four people. All of them looked like criminals, with gold rings and heavy chains and white sandals. I could never find out who they were.
The meeting was short with Sen looking extremely uncomfortable. His chief aide Debjani Mukherjee was also there with flaky foundation, overdone make-up and a sweet smile on her face.
Sen had a kind side too. Salaries in the paper were paid in batches – first the office boys, peons and drivers, then junior reporters and finally the seniors.
He felt that the poorest needed the money first. That was the ultimate contradiction in his character. (By Seema Guha)