Mamata government gets the rap after chit fund company collapse hits lakhs (West Bengal Newsletter)

Kolkata, April 20 (IANS) With the Mamata Banerjee government a month away from completing two years in office, the political atmosphere has become surcharged in West Bengal following the virtual collapse of a big chit fund-funded company affecting the lives of lakhs of agents and depositors.

The Sharadha Group, which had collected hundreds of crores of rupees from people, mainly in villages and small towns by promising huge returns, has seemingly shut shop after a series of allegations that it was defaulting on payment.

The group had invested a big way into the media – bringing out or acquiring a number of newspapers in Bengali, English, Hindi and Urdu and taking over several news and entertainment channels.

In a series of announcements since last month, group owner Sudipta Sen announced the closure of the media business, rendering over a thousand journalists and non-journalists jobless.

In meetings with the senior media officials, Sen had claimed that he was in “no position” to pay salaries or run the media publications and channels, which numbered at least 10.

With capital market regulator SEBI cracking the whip and chit fund companies for flouting the rules, which raised concerns over safety of public money, pressure on the group’s finances had mounted. The Serious Fraud Investigation Office of the union ministry of corporate affairs had also stated looking into allegations of financial irregularities and default in payment leveled against the Saradha Group and other such companies.

The crisis at the group was brewing since January.

Sen went incommunicado since April 16 and the company’s offices across the state which controlled the chit fund business also closed shutters. Over the past two days, angry depositors have attacked the company’s agents and ransacked the group’s offices in the districts while the police raided its head office in Kolkata and seized dcocuments.

With the company’s newspapers and channels supporting the Trinamool to the hilt for over three years and Trinamool Rajya Sabha MP Kunal Ghosh being the group Media Chief Executive, hundreds of agents and depositors have daily been demonstrating at the party’s state headquarters and Mamata Banerjee’s residence.

“We want Sudipta Sen to be arrested and brought to justice. Where has all the money we collected from the depositors gone? We are unable to return to our village. We took up the job of agent of the company’s chit fun business as we found local Trinamool leaders were backing it,” said an agent near the Trinamool office.

“My husband does not earn much. I had been depositing Rs.400 every month for the last two years hoping for high returns. I am very poor. This is my hard-earned money. Will I get it back,” a middle-aged woman asked.

The chief minister has said police have launched a manhunt for arresting Sen, who has gone underground.

Trinamool general secretary Mukul Roy put the blame for the mushrooming of chit funds like those pomoted by the Saradha Group on the previous rulers Left Front. “These companies started their business durig the Left Front regime,” he said.

Ghosh, on his part, has said in a post on his Facebook account that he was only a salaried employee of the group’s media unit and had put in his papers.

“I was never a director or owner. I was connected with media wing only. I was never connected with any other aspect of the business of the group, According to the terms of my agreement, finance, accounts were never part of my mandate,” he said.

However, the opposition is in no mood to let go of the opportunity to hit out at Trinamool, particularly Banerjee.

Congress leader and union Minister of State for Railways Adhir Chowdhury alleged that Sen was close to Banerjee, who attended the company’s functions on a number of occasions.

“There is a close association between the Trinamool Congress and Sen. This company has been looting gullible people for years and earning crores. I can say with authority that the chit fund has got direct backing of the ruling party. While they started business during Left Front rule, their business expanded manifold during Banerjee’s regime,” said Chowdhury.

(Sirshendu Panth can be contacted at [email protected])

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