Govt expands terms of reference of chit fund probe panel

Latest guideline mandates prioritising refund of money to small investors

The state government has expanded the terms of references for judicial commission probing the chit fund scam to safeguard the interests of the small investors duped by the Ponzi schemes.

“The government has appended a new terms of reference to the old ones where it has asked us to identify the bona fide investors who can get their money back. It has asked us to name the companies where they have deposited their and also suggest the ways how to refund money to the small depositors from the corpus fund after properly identifying them,” said Justice Madan Mohan Das, who heads the probe panel.

It may be noted the government has constituted a corpus fund of Rs 300 crore to refund money to the duped investors.

Though it has not been specified in the terms of reference about who should qualify as a small investor, sources said, the government is considering a proposal to prioritise refund of money to people who deposited less than Rs 10,000 under various schemes of chit fund firms.

The commission, however, said it would set criteria to define small investors after examining the nature and amount of investments made in difference schemes.

“We have received at least 10 lakh affidavits and almost 1.5 lakh of them have been scanned. Once substantial number of claim affidavits are digitised, we will be able to send our recommendation in the form of an interim report,” Das said.

Last year, the government planned to amend the Orissa Protection of Interest of Depositors Act, to define small investors as it wanted to give priority to them. However, the issue of small depositors did not figure in the first terms of reference of the commission, which was created in July 2013 and was headed by late Justice R K Patra till his death in January, this year.

The new terms of reference was added after Justice Das took over the charge in February this year.

In 2013, when the chit fund scam came to limelight, the state government had announced creation of Rs 300 crore corpus fund to return money to the investors. It had also passed two acts, which empowered it to disband the chit fund companies operating under the cooperative act and auction properties owned by the chit fund companies and deposit the money in the corpus fund. It had also ordered an inquiry by crime branch department of state police to track down the promoters of chit fund firms.

But things took ugly turn when the probe conducted by Central Bureau of Investigation (CBI), which took up the investigations following a Supreme Court order, indicated involvement of ruling party leaders in the scam, embarrassing the government. It has since been advocating to fast forward the refund process through digitisation of the claim records and identification of small depositors.