SC order to inquire into Saradha scam welcome: D. Raja(Update:Saradha)

Communist Party of India (CPI) general secretary D. Raja on Friday hailed the Supreme Court's order to the Central Bureau of Investigation (CBI) to investigate the Saradha Chit Fund Scam in West Bengal.

"We welcome this order of the Supreme Court. We have been demanding this for a very long time, as we could see the dimensions of this fraud," Raja told ANI here.

"We wanted an investigation by the CBI. This is a very positive order and the CBI should act firmly and neutrally," he added.

Raja's reaction came hours after the Supreme Court had ordered the Central Bureau of Investigation (CBI) to investigate the collapse of the Saradha Group, a privately-run savings company that left lakhs of small investors bankrupt in West Bengal.

"In view of inter-state ramifications, involvement of higher ups, including politicians and aspects of money laundering, a CBI probe is necessary," the apex court said.

The apex court bench said the investigating agency will also look into any other ponzi scheme involved in chit fund scam in West Bengal, besides Saradha.

The Kolkata-based Saradha Group, ponzi scheme had over 10,000 registered chit funds across the country and with an aggregate turnover of Rs.30, 000 crore per annum.

The Saradha Group is said to have defrauded thousands of investors, including poor people, in West Bengal, leading to the arrest of its owner Sudipta Sen.

The industry is governed by Chit Fund Act 40/1982 and is regulated by state governments with their own set of rules. Reserve Bank of India is the principal regulator and at the state level Registrar of Chits/The Inspector General of Registration oversees these regulations.