The Saradha scam, also known as Saradha Group financial scandal, was a major financial scam that surfaced in 2013. 

 

Investigation into the multi-crore ponzi scheme has been on since then.

 

The Saradha scheme

 

The scheme, run by Saradha Group (an umbrella company with 200 private players), was launched in the early 2000s by businessman Sudipto Sen. Aimed at small investors, the scheme became popular in a very short time as it promised high returns. The money was collected through a wide network of agents, who were paid commissions of over 25 per cent. 

 

The Saradha Group raised about Rs 2,500 crore in a few years time. The company used varied marketing means to build its brand. Apart from popular marketing techniques like celebrity endorsements, the company used to sponsor cultural events such as Durga Puja and invest in popular football clubs to attract more investors.

 

The scheme soon expanded to Odisha, Assam, and Tripura, and the number of investors reached close to 1.7 million.

 

The TMC connection

 

Over a dozen TMC MLAs and MPs, including ministers, have been questioned by CBI in connection with the scam. Many of these leaders were directly involved in the group's operations. 

 

Actor and TMC leader Satabdi Roy was Saradha's brand ambassador. Then TMC MP Kunal Ghosh was appointed CEO of the media group in which Saradha had invested Rs 988 crore. Another party leader Srinjoy Bose was also involved in the group's media operations.

 

Madan Mitra, the then West Bengal Transport Minister, headed the group’s employees’ union.

 

Apart from TMC, the group allegedly also had connections with Congress leader Matang Sinh and Assam BJP leader Himanta Biswa Sarma, who was then in the Congress.

 

How the Saradha scam unravelled

 

Problems started in the company in 2012, when SEBI asked the group to stop accepting money from investors and obtain the regulator's permission to run its schemes.

 

By January 2013, the company was engulfed in a crisis when for the first time Saradha Group’s cash inflows were found to be lower than its outflows. The scheme collapsed by April, prompting agents and investors to file police complaints.

 

SIT and CBI probe

 

The West Bengal government initially set up a Special Investigation Team (SIT), headed by the then Kolkata Police Commissioner, Rajeev Kumar, to probe the case. The case was transferred to the CBI in 2014 at the behest of Supreme Court.

 

CBI considers Kumar as a potential accused in the case and has accused him of not handing over crucial documents to the agency. 

 

Kumar first grabbed headlines in February 2019, when the CBI was stopped by the Kolkata police, from questioning him.

 

Bengal Chief Minister Mamata Banerjee rushed to the spot and staged a three-day sit-in protest against CBI's move.