Enact laws to prevent chit fund fraud, Sushil Modi urges centre

Kolkata, April 27 (IANS) Emphasising that states do not have laws to stop fraudulent companies from duping depositors, Bihar Deputy Chief Minister Sushil Kumar Modi Friday said the centre has the responsibility to enact effective laws against such firms and sought the immediate intervention of the prime minister in the chit fund muddle.

“It is very difficult to check these companies with state laws. These companies are operating in different states. So the central government should take measures,” the BJP leader said.

Modi also urged Prime Minister Manmohan Singh to intervene in the Saradha Group chit fund scam in West Bengal. He was speaking on the sidelines of an event organised by the Bharat Chamber of Commerce here.

Modi said it was for the centre to make a “strong law” against such shady firms operating across the country, especially in West Bengal, Bihar, Assam and the north eastern states.

“It is the responsibility of the central government to engage SEBI (Securities and Exchange Board of India), SFIO (Serious Fraud Investigation Office) and the ministry of company affairs in the investigation against such firms and make a unified regulatory authority,” he said.

On the mushrooming of chit funds in the country, the BJP leader sought the immediate intervention of Prime Minister Manmohan Singh and Union Finance Minister P. Chidambaram.

“I think (corporate affairs minister) Sachin Pilot is small fry in the whole system of the central government. So the finance minister and the prime minister should intervene,” he said.

He also urged the government to ban chit fund companies, against which the SFIO was investigating, from raising money from the public until the central agency completed the preliminary probe.

“The preliminary investigation should be completed within three months,” he said, adding the SFIO was, however, facing a huge manpower shortage.

“There is no manpower in SFIO, it has a ninety percent vacancy, he said.

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