Home / Companies / News /  Supreme Court directs CBI to probe Saradha, other deposit-taking firms

Kolkata: The Supreme Court on Friday ordered the Central Bureau of Investigation (CBI) to launch a probe into the operations of deposit-taking firms in West Bengal and Odisha, including the now-defunct Saradha Group, a year after it ran aground and defrauded depositors of at least 2,000 crore.

The reasons cited by judges T.S. Thakur and C. Nagappan are the inability of the state police to trace where the money has been stashed and the possible involvement of several politicians and others “wielding considerable clout and influence"—both in the state and at the Centre.

“Investigation conducted so far puts a question mark on the role of regulatory authorities (such as) Sebi (Securities and Exchange Board of India), Registrar of Companies and officials of RBI (Reserve Bank of India)," the ruling said, adding that the apex court wants the “larger conspiracy" to be closely examined.

The judges said they formed their view on the possible involvement of politicians in the scam on the basis of a submission made by lawyers for the West Bengal government, in which certain names of people whom the police wanted to interrogate were given in a “sealed cover".

The court didn’t, however, disclose the names. It said deposit-taking firms had raised an estimated 10,000 crore in West Bengal and Odisha combined, of which Saradha alone had raised some 2,500 crore. The estimate was based on a forensic audit report prepared by Sebi.

Coming only three days before the final phase of polling in the ongoing general election, the development was widely seen as an embarrassment for the Trinamool Congress-led administration of West Bengal.

It has through months opposed the entry of any federal agency into the probe, but Friday’s judgement said the state was unable to make headway into the “larger conspiracy".

Accused of shielding Trinamool Congress leaders associated with the Saradha Group, the police in West Bengal will now have to wind down their investigation.

Till now only one Trinamool Congress leader, Kunal Ghosh, a Rajya Sabha member, has been arrested for his alleged links with the Saradha Group—one of eastern India’s biggest deposit-mobilizing enterprises. Ghosh used to be the chief executive officer of the Saradha Group’s media wing.

Friday’s development will not have an impact on the Trinamool Congress’s performance in the ongoing general election, claimed Amit Mitra, West Bengal’s finance minister and a spokesperson for the party. Seventeen Lok Sabha seats in West Bengal go to the polls on the last day of voting on Monday.

Also on Friday, the Supreme Court ordered CBI to investigate 44 chit fund companies in Odisha. Alok Jena, a former Congress party politician, had moved the Supreme Court last July, calling for a CBI probe into an alleged chit fund scam worth 4,500 crore.

The West Bengal government, which in the wake of the collapse of the Saradha Group in April last year formed a special investigation team to deal with the scam, said on Friday that the responsibility of recovering money for depositors now shifts to CBI.

“So it’s now the Centre’s responsibility to compensate the depositors," chief minister Mamata Banerjee said, addressing a rally in Behrampore. “Good…we have been spared."

Although opposition leader Surjya Kanta Mishra, a politburo member of the Communist Party of India (Marxist), or CPM, said that it was only now that the victims of the scam could get justice, Banerjee said it didn’t matter to her party that CBI is to take over the investigation.

Friday’s judgement clearly said the commissions of inquiry set up by the state governments of West Bengal and Odisha to receive complaints from depositors could continue to function in the same manner as before.

The commission in West Bengal, which was founded a year ago and headed by retired judge Shyamal Sen, was tasked with identifying the victims of the fraud for being compensated from a 500 crore fund created by the state.

In the light of Friday’s development, it is a possibility that the West Bengal government could ask the commission to “wait and watch", said a key official, asking not to be named.

Sen said the commission would cooperate with CBI, but refused to make any further comment until he had studied the Supreme Court judgement.

West Bengal’s finance minister Mitra said the state had already paid 167 crore to compensate the poorest of depositors—over 450,000 in number—and had plans to pay some 250,000 more.

The commission was to start selling assets recovered from the Saradha Group, but that responsibility now goes to CBI, he added.

A section of Trinamool Congress leaders said Friday’s apex court order could be used as a handle to pressure their party to support the dominant coalition. They privately admit that some of their party’s leaders had close ties with the Saradha Group and several other deposit-taking firms.

In the run-up to the 2016 assembly elections in West Bengal, CBI could cause an embarrassment for the party by hauling its leaders to custody. That apart, CBI could precipitate a crisis for the state administration by expanding its probe to other deposit-taking enterprises as well, Trinamool Congress leaders said, asking not to be named.

Friday’s judgement makes it clear that the apex court wants CBI to go after all deposit-taking companies against which complaints have been received, and not focus on the Saradha Group alone.

Mitra said he expected CBI to closely examine the role of Left Front leaders as well because most of these enterprises were founded during the CPM-led coalition’s 34-year regime till 2011.

Shreeja Sen in New Delhi and Chitrangada Choudhury Aga in Bhubaneswar contributed to this story.


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