Saradha Group crisis deepens as depositor commits suicide

Pressure mounted on the state government even as offices of the deposit-taking firm continued to be mobbed across the state, and its chairman and managing director Sudipta Sen remained on the run.

At risk is at least ₹ 20,000 crore, mostly in small savings from the poor, who can ill-afford the loss, state officials said.

Their estimate is based on the decline in deposits in state-run small savings schemes in the past five-six years. This amount is thought to have been diverted to private firms such as those of the Saradha Group, which promised higher returns.

“Companies like these have ruined household savings in West Bengal in every decade since the 1980s, but this crisis is completely different because of its magnitude," a state government official said, requesting anonymity.

West Bengal is planning to introduce a new law to flush out deposit-taking companies, said Mukul Roy, general secretary of the ruling Trinamool Congress party. However, such a law will take at least six months to be implemented because it would need the consent of the Union government, officials said.

The current crisis, from which a “law-and-order situation has already arisen", is not a rerun of anything experienced by the state administration before, said the official cited earlier,

A contagion is unavoidable, according to government officials consulted over the crisis, and will only extend people’s losses. Other deposit-taking firms that have yet not defaulted on repayment will collapse one by one because fresh collections will dry up, they said. None of the officials wanted to be named.

The image of the Trinamool Congress, led by chief minister Mamata Banerjee, has taken a severe beating on account of the undeniable proximity of some key Trinamool Congress leaders to deposit-taking companies such as the Saradha Group.

Kunal Ghosh, a Rajya Sabha member nominated by the Trinamool Congress, was editor and chief executive of the Saradha Group’s now mothballed media business.

Ghosh, who could not be contacted despite repeated attempts, said in a Facebook post on Friday that he had joined the Saradha Group as an employee after it entered into an alliance with Sangbad Pratidin, a Bengali newspaper that he edited and that was owned by Srinjoy Bose, another Trinamool Congress Rajya Sabha member.

The crisis couldn’t have happened at a worse time for Trinamool Congress because the state soon goes to panchayat (village council) polls, ahead of the 2014 general election.

Mukul Roy and commerce and industries minister Partha Chatterjee said no one will be spared if found to have helped the Saradha Group to expand its business, but they tried to dissociate their party from the company.

“Those involved will pay the price, but they are individuals, not the party. You could take these as the chief minister’s words, not just mine," Chatterjee said, indicating that the Trinamool Congress will weed out some of its leaders to protect its image.

Roy alleged that these deposit-taking companies started business in 2008 or thereabouts with the approval of the erstwhile Left Front government.

But former finance minister Asim Dasgupta said the state government under the Left Front’s rule had launched a probe into the affairs of four such firms, including the Saradha Group. “What happened to these investigations?" he asked.

The investigations were dropped after the Trinamool Congress came to power in 2011, a police officer involved in the matter said, requesting anonymity.

While officials racked their brains at Writers’ Buildings, the state secretariat, the human crisis fast escalated.

At least two people have killed themselves over the past three days over the Saradha Group mess. Urmila Pramanik, 50, who had deposited her savings of ₹ 30,000 with the Saradha Group, set herself ablaze on Sunday. She succumbed to burn injuries at a Kolkata hospital.

Another Saradha Group agent in Diamond Harbour in South 24 Parganas district consumed poison on Sunday after he was attacked at his home by depositors. His condition was last reported to be critical.

Offices of the Saradha Group and other deposit-taking companies were vandalized across the state. Roads were blocked in protest, and skirmishes were reported from across the state over the weekend.

Depositors from across the state said they had thought their money to be safe in the hands of the Saradha Group because of its proximity to Trinamool Congress leaders, which they viewed as official endorsement of its diverse businesses. Most of those, though, did not ever exist, show filings with the Registrar of Companies.