While the left Front regime had cracked down on Ponzi schemes in West Bengal, the Trinamool Congress Government has been unconcerned
Battleground West Bengal has been plundered by serious fraud perpetrated by multi-level marketing companies, otherwise known as chit funds. Political conflict, that permeates everything in West Bengal, worked to the advantage of the fraudsters, because the complaints lodged by various political leaders were either ignored or brushed aside by the West Bengal Government headed by Mamata Banerjee. Oddly enough, even complaints from Trinamool Congress leaders, such as Member of Parliament Somen Mitra, were disregarded.
The Union Minister of State for Railways, Mr Adhir Chowdhury, and Mr AH Khan Choudhury, the Union Minister of State for Health and Family Welfare, had complained to Prime Minister Manmohan Singh about the proliferation of Ponzi schemes in the State and the failure of the State Government to take any action to restrain the companies operating these frauds on tens of thousands of mostly rural and semi-urban depositors. Defending the right of the various businesses now under investigation for fraud were many Trinamool Congress functionaries.
In its own defence, the Trinamool Congress is attempting to protect its Government led by Ms Mamata Banerjee, with senior leader Mukul Roy declaring that the previous left Front is to blame for encouraging the Ponzi scheme operators to do business in West Bengal. This may be stretching the story beyond the point of credibility, since the earlier Communist Party of India (Marxist)-led left Front Government had been trying to pass a new law enabling the State Government to act against fraudsters as far back as 2003.
Thereby hangs a tale of two Governments: One, with a 34-year history of hunting down the fraudsters, and the other that has woken up to its responsibilities post-action by the Serious Fraud Investigation Office. The story starts in 1978, when the left Front was a newly-minted experiment in coalition and in establishing an alternative model of governance. Mr Ashok Mitra was the State’s Finance Minister and he went after the best-known of the fraudsters in that time, Sanchayita, with just about sufficient legal cover to take action. He did not swoop down on them without a warning. For weeks, the West Bengal Government put out advertisements in newspapers warning depositors that Ponzi schemes were unsafe and fraudulent businesses. That did not endear the CPI(M) or its Government to depositors who were very tempted by the fantastic returns that Sanchayita promised — anything between 48 and 36 per cent. The best as well as the gullible were tempted by the scheme; everyone wanted to double their money.
Mr Mitra swooped down on Sanchayita through the State's Commerical Tax Department's Bureau of Investigation. One evening, the DIG of the Bureau filed an FIR at the Hare Street Police Station and proceeded to raid the premises of Sanchayita. The owners were arrested and the operations went kaput. Thousands of people lost money, but the West Bengal Government appointed a Receiver to deal with all the cases and salvage something.
In the 1990s, Ponzi schemes re-surfaced. The best-known is that of Verona. Under Mr Asim Dasgupta's watch, over a 100 such operatives were rounded up, arrested, cases were filed and some of them were sent off to prison. In 2003, aware that the West Bengal Government's legal options were limited in acting against such Ponzi schemers, Mr Dasgupta piloted the Protection of Interest of Depositors in Financial Institutions Bill in 2003 through the West Bengal Assembly.
However, Mr Dasgupta was not merely waiting for legislative empowerment. He set up the Economic Offences Wing and started over a 100 cases in 2010, including against the Saradha Group, now identified as the nigger in the woodpile by the Serious Frauds Investigation Office.
Under the left Front's watch, Ponzi schemes were closed down or controlled, because the State did not want people to lose money. Under the Ma-Mati-Manush watch, warnings from within the Trinamool Congress and its one-time ally, the Congress, were disregarded. The consequences are evident. The moral of the story is: Where there is a will, there is a way.