WB, N-E hot-bed of investment frauds; NRIs major target: probe

SFIO, Sebi and other entities investigating Saradha group, other firms

Amid a raging controversy over alleged cheating of gullible investors by Saradha group, the regulators have found that West Bengal and North-Eastern states have become a hot-bed of such frauds and NRIs from these regions are the major target.

While the Centre has announced an SFIO (Serious Fraud Investigation Office) probe into the affairs of Kolkata-based Saradha group and other such entities across the country, market regulator Sebi is also investigating illegal money-pooling activities of many such groups.

While the capital markets regulator is focussing its probe on violation of Collective Investment Scheme (CIS) norms by these companies, it has prima facie come across various instances of funds being channelled to and from other countries and these cases, after further probe, could be referred to other agencies like the Enforcement Directorate, RBI and other agencies, a senior official said.

The Enforcement Directorate and the Income Tax department have already begun their own respective investigations into the matter and assistance could be sought from RBI and other regulatory and enforcement agencies as well, he added.

The preliminary probe into Saradha group and other continuing investigations into various other entities show that West Bengal and North-Eastern states like Assam and Tripura have become the favourite hunting grounds of the companies engaged in illegal money collection activities.

Besides, a large number of NRIs having origins in these states are understood to have been defrauded by many such companies, including Saradha group.

The regulators have found that almost none of the entities alleged to have defrauded the gullible investors are actually registered as or running chit fund companies, although their investment schemes are commonly known as 'chit funds' in the region.