Sudipta Sen, the Chairman and Managing Director of Saradha Group, a non-banking financial company (NBFC).

SEBI directs Saradha MD Sudipta Sen to wind up schemes, return money to depositors

INDIA TODAY ONLINE | New Delhi, April 24, 2013 | 12:43

Saradha Realty India Ltd and its managing director Sudipta Sen were directed by the Securities and Exchange Board of India (SEBI) to wind up its existing collective investment schemes and refund the money collected with returns which are due to the investors within three months.

The company was also castigated for contravening the SEBI provisions by launching such schemes without its permission.

On a day Sen was arrested from Jammu and Kashmir, the order said: "Since the noticee (Saradha Realty India Ltd) has launched 'collective investment schemes' without obtaining certificate of registration from SEBI, it has contravened provisions of section 12(1B) of the SEBI Act and regulation 3 of the CIS Regulations."

Last week, the Saradha Group went bust and its offices downed shutters, unable to repay the depositors - mainly poor people in villages and small towns of West Bengal who had parked their hard earned money with the company, lured by the promise of high interest rates.

In an order, the SEBI directed that the company would have to submit a winding up and repayment report in accordance with the CIS regulations.

The capital market regulator said if the company failed to comply with the order, prosecution proceedings would be initiated against Saradha Realty and its directors.

It also said in such an eventuality, the matter would be referred to the state government or the local police to register civil/criminal cases against Saradha Realty India Ltd. and its directors and its officials in charge of the schemes "for apparent offences of fraud, cheating, criminal breach of trust and misappropriation of public funds".

The SEBI order, signed by its wholetime member Rajeev Kumar Agarwal, said the matter would also be refered to the ministry of corporate affairs, to initiate the process of winding up of Saradha Realty India Ltd.

The SEBI further directed Saradha Realty India Ltd and Sen not to access the capital market and "restrain and prohibit" from buying, selling or otherwise dealing in the securities market till all its collective investment schemes were would up "and all the monies mobilised through them are refunded to the investors".

The regulator had been inquiring into the operations and activities of the company after it received a letter exactly three years back from the Economic Offences Investigation Cell of West Bengal, informing that the company was collecting contributions of money from the public.

With IANS Inputs

http://indiatoday.intoday.in/story/sebi-directs-saradha-md-sudipta-sen-to-return-money-to-depositors/1/267368.html

Subramanian Swamy ‏@Swamy39 29m
@drtapeshwarsehg :In the Aircel Maxis scam, she paid a visit to Kuala Lumpur,received at the airport by the CEO of Maxis and to a posh hotel
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Subramanian Swamy ‏@Swamy39 1h
PTs: According to a letter written by Chit Fund Saradha group Chairman to the CBI, Ms. Nalini Chidambaram got Rs 1 crore as "legal fees" WOW
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Chit fund scam: Court sends Sudipta Sen to 4-day transit remand
PTI Posted online: Wed Apr 24 2013, 13:12 hrs

New Delhi : A local court in Kashmir today granted four-day transit remand of chit fund scam accused Sudipto Sen and two others to Kolkata police.

Sen, chairman of Saradha group which is accused of defrauding thousands of depositors, along with director Debjani Mukherjee and another company official Arvind Singh Chauhan were presented before Chief Judicial Magistrate of Ganderbal, Parvez Hussain Kachroo, who granted the transit mremand.

The trio, who were detained from Sonamarg area of the district yesterday, will now be taken to Delhi on way toKolkata. A Scorpio vehicle with a West Bengal number plate has also been seized.

Earlier, Sen, Mukherjee and Chauhan were put through medical examination before being presented in the court. Doctors declared them fit to be taken out of the Valley by the Kolkata police team. Lakhs of investors of the chit fund group have hit the roads alleging they have been duped of over Rs 30,000 crore. Hundreds of agents of the company have also been rendered jobless.

The West Bengal government has announced formation of a Special Investigation Team and a high-level inquiry into chit fund companies after the collapse of Saradha group. The bubble burst after capital market regulator SEBI started cracking the whip on chit fund companies for flouting rules, triggering pressure on the group's finances.

I was used, blackmailed by Trinamool MPs: Saradha Group CMD to CBI

Saradha Group CMD Sudipta Sen has sent an 18-page letter to the CBI containing names of several key politicians, officials and legal experts who allegedly milked the company for money.

The letter, which reached the CBI in Delhi as Sen remained at large, was forwarded by the agency to its office in Kolkata, and it was subsequently referred to the Bidhannagar police commissionerate.

Bidhannagar police commissioner Rajeev Kumar received Sen's letter on April 19, top sources said. The letter could potentially blow the lid off the nexus between politicians and Bengal's chit fund industry, which has allowed lakhs of investors in villages and small towns to be duped of their savings.

Arnab Ghosh, DC, DD, Bidhannagar police commissionerate, confirmed having received the letter from CBI. "It is a letter from an accused who is on the run," Ghosh said.

The letter, which has reportedly been attested by Sen on each of its 18 pages, is believed to have described his close links with at least two Trinamool Congress Rajya Sabha members and a minister of the Assam government.

The letter allegedly describes how Sen was "blackmailed" by these MPs and the minister for money. Sen's chit fund business was well entrenched in Assam, and his media company had a daily newspaper, Seven Sisters' Post, in Guwahati.

The paper has shut down, along with all the publications that he had opened or taken over in Bengal.

Attached to the letter is a list of 22 names of people who allegedly "used" Sen to make money. At least five senior political leaders are learnt to be among them, besides a dozen businessmen who ran their own chit fund businesses in the state.

The letter allegedly describes how Sen had been "forced" to take over an ailing and loss-making motorbike manufacturing unit in Polba near Singur by a business lobby close to the Trinamool Congress government. It alleges that the TMC MPs promised Sen a free run in his businesses, without any government "interruption and intervention".

Top CBI sources said the letter narrates the story of the origin and growth of Sen's chit fund business. It allegedly names a senior functionary of a Kolkata football club who promised to "manage" things for him by using a "special connection" he had with an influential central government minister. This football official allegedly took a huge fee to set up Sen's line with the minister.

The sources said the letter also mentions the wife of a top UPA government minister, who is a legal expert. Sen allegedly paid around Rs 1 crore to this woman advocate to draft the legal papers for his takeover of a local news channel.

The letter is also believed to mention how Sen's own employees cheated him, leaking "confidential datas" of the company to rival firms.

It is learnt that the letter also mentions a number of projects in which the Saradha Group spent a lot of money, only to be in the "good books" of the government. It mentions donations of ambulances, motorbikes and bicycles, which the state government allegedly distributed in Naxal-hit Junglemahal.

West Bengal Chief Minister Mamata Banerjee has denied knowledge of the scam, or of the now three-year-old SEBI probe against Sen. The rash of companies that operated under the Saradha Group umbrella were never registered with the government for collecting deposits from the public. But Sen continued to evade action for at least seven years during which his companies raised crores of rupees from depositors in various schemes.

http://www.indianexpress.com/story-print/1106992/

Saradha chit fund chief arrested in J-K, depositors furious in West Bengal

SOUDHRITI BHABANI  | Kolkata, April 24, 2013 | 08:46

Sealed office of Saradha Group chit fund company in West Bengal. Fifty-year-old Urmila Pramanik had invested Rs 30,000 in the Saradha Group, the chit fund company in West Bengal that has gone bust. Unable to bear the shock of her life savings wiped away, she took her life on Sunday by drinking poison. Lakshman Ghorui (35), who collected money for the company as an agent, too tried to take his life but was unsuccessful. He had collected Rs 60 lakh from depositors. They are not alone. The bust-up has driven thousands of depositors to the wall, reviving memories of the collapse of Sanchayita Investments in the early eighties when several investors and agents committed suicide. The Saradha Group's collapse is believed to have wiped out Rs 20,000 crore of depositors' money, a figure that could go up as more details emerge. People protest after Saradha Group's collapse. More than 1,000 journalists and non-journalists have lost their jobs after the group wound up at least 10 media organisations, newspapers and television channels it had launched or acquired since 2010. One of its entertainment channels, Tara Music, was closed on Bengali New Year (April 15) amid dramatic scenes of anchors and other television crew members breaking down in front of the camera. Thousands of angry agents who worked for the group, including women, have staged protests across West Bengal seeking action against the company. Many offices of the group were damaged by disgruntled investors. There are more than three lakh agents of the Saradha Group spread across Bengal. Breaking her silence, the chief minister on Monday squarely blamed the opposition CPM for the scam that has left lakhs of people in the lurch. Banerjee formed a high-level inquiry committee, led by retired Justice Shyamal Sen, and an investigation team to look into the matter. The inquiry was instituted under the Commission of Inquiry Act. The bust-up has driven thousands of depositors to the wall. "I'm very rough and tough. We will see how the money can be returned to the investors," Banerjee said. Union minister of state for railways Adhir Chowdhury, however, blamed the TMC for promoting the group across Bengal. "While Kunal Ghosh was the CEO of the media cell, state transport minister Madan Mitra headed Saradha's agents' union. At a programme, he once said that he would save Saradha with all kinds of help. We demand an investigation to find out the role of the ruling regime into Saradha's business," Chowdhury told Mail Today. Trinamool Congress' Rajya Sabha MP Kunal Ghosh was the group CEO of Saradha's media business that suddenly closed down almost a dozen magazines, TV channels and other media businesses over the past one month.