People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 17

April 28, 2013


Chit Fund scam Exposes TMC Govt


From Our special correspondent in Kolkata


THE chit fund scam in West Bengal has once again exposed the nexus between crony capitalists, money launderers and the ruling party. The unfolding episode of Sharada group’s fraudulent activities and duping of thousands of people has shattered the media-managed image of Trinamul leader Mamata Banerjee herself.


Till this report is written, it has come into open that the Sharada group has collected deposits from thousands (actually lakhs) in the name of different companies and swindled the money. Their shady operations have collapsed and depositors have lost their money. That the company has collapsed came into daylight with the closure of media houses they were operating. Hundreds of agents came to street as they were being challenged by depositors. Group’s offices in districts were ransacked by angry depositors. In these demonstrations, anger was directed towards TMC ministers and TMC leaders.


Sudipta Sen, the chief of Sharada group fled from Kolkata and was later arrested in Sonemarg in Kashmir valley.


From all reports that have appeared in media, one feature is clear: Sharada group expanded its business in close collaboration with TMC. It was in fact a public perception even before the scam was busted. From 2009, after Trinamul won majority seats in West Bengal in Lok Sabha elections and joined the government at centre, Sharada group’s activities increased manifold. In 2011 assembly elections the agents of this group and some other concerns actively joined in campaign against Left Front, created a panic that all such funds would be closed if Left Front returned to power. The Left Front government has passed a bill in state legislature to control the activities of such shady funds and the bill was sent to centre in 2010. The bill with stringent clauses was not returned with mandatory approval of the president. It was widely believed that TMC, a partner in UPA then, resisted the approval. 


The state government, led by TMC deliberately refused to heed to any warning about these shady funds. In October 2012, Serious Fraud Investigation Office (SFIO) of the corporate affairs ministry started probing the chit funds operating in Bengal. Among the big funds, one was Sharada and another headed by a Trinamul MP with interests in food processing and retailing, among others. According to media reports, the agency did not get any specific information from the state government on the chit funds even after repeated requests.


One Trinamul MP wrote to centre alleging irregularities, but no action was taken. In April 2012, union minister of state for health Abu Hasem Khan Chowdhury of the Congress wrote to the prime minister, alleging that chit funds were financing the Trinamul Congress. According to reports, then corporate affairs minister Veerappa Moily also confirmed there was a direct collusion between the chit funds and the ruling Trinamul Congress. He even accused a TMC MP of acting as a go-between.


The RBI and the state-level bankers’ committee (SLBC), West Bengal, also cautioned the state government both in public and in closed-door meetings. On December 7, 2012 RBI governor D Subbarao said in Kolkata that the state government was supposed to initiate suo moto action against such companies. Only after bank representatives insisted on strong actions at SLBC meetings, chaired by state finance minister Amit Mitra, did the state’s finance department ask the district magistrates in January 2013 for reports on the chit funds operating in their districts. Not a single report has reached the government. The exercise proved to be an eyewash.


And now, it has come into open that the collusion between TMC and Sharada was deep. Two Rajya Sabha members of TMC_Kunal Ghosh and Srinjoy Bose have been directly indicted either taking large amounts from the group or entering into questionable “deals” with it. Another Lok Sabha member, worked as ‘brand ambassador’ of the company. Allegations have surfaced against ministers and many district and local level TMC leaders have come into public domain.


CPI(M) and Left Front have demanded independent enquiry and quick approval of the bill that Left Front government sent for assent. The chief minister, busy in shielding her associates and party leaders has also advised the losers that "What's gone is gone. Be patient. We are making a law for you." The opposition slammed Banerjee for such casual remark. Leader of the opposition Surjya Kanta Mishra said: "The CM's message is clear. She said, what's gone is gone and if there is more to be stolen, steal that as well."