SFIO finds Saradha's 14 firms guilty, face prosecution nil

SFIO finds Saradha's 14 firms guilty, face prosecution

by IBNS 14 Sep 2014, 11:34 pm

#SFIO # Serious Fraud Investigation Office

New Delhi, Sept 15 (IBNS): Saradhas 14 firms will face prosecution for gross violation of several laws as they were running ponzi schemes. Serious Fraud Investigation Office said in a statement, media reported.

According to reports, the Serious Fraud Investigation Office (SFIO) under the Ministry of Corporate Affairs on Monday completed its probe into the multi-crore Saradha chit fund scam and said 14 firms were running ‘ponzi schemes’ and would face prosecution for violation of several laws. 

 
SFIO in its report stated, investigations have revealed that primary source of payments to subscribers was collections made from newly enrolled members rather than income generated from investments companies. 
 
The activities of these companies were found to be in serious violations of the Companies Act, the Sebi Act, and several provisions of the Indian Penal Code, the Corporate Affairs Ministry said in a statement on completion of the SFIO probe. 
 
Several instances of violation of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 have also been found. 
 
"The companies, their promoters, directors and managerial personnel have been found guilty on many counts of various provisions of the Companies Act... dealing with illegal collection of deposits and false statements, etc", the report said. 
 
It has been learnt that the SFIO will share evidence with the Securities Exchange Board of India and Central Bureau of Investigation. 
 
Reacting to this, the Centre has said, "Since, CBI is now investigating cases under the IPC under orders of the Supreme Court, it has been decided to share evidence collected by the SFIO with CBI so as to avoid duplication in prosecutions.” 
 
The scam, wherein lakhs of investors in West Bengal and other states were defrauded of thousands of crores through illegal money pooling activities, came to light early last year. 
 
In May this year, the Supreme Court had handed over the Saradha chit fund scam probe to the CBI and asked the state governments to co-operate. 
 
Since then, the central probe agency along with Enforcement Directorate (ED) had questioned many people including leaders from the Trinamool Congress party, while Saradha Group chief Sudipta Sen and some others were put behind the bars. 

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