Tuesday, April 30, 2013
IT is indeed very sad that the Saradha Group has left its investors in the lurch and cheated the hard earned money of poor workers and farmers in the process. Their anguish and sorrow cannot be explained in words. Already two people have committed suicide. A government which punishes its citizens for smoking a cigarette should be proportionately vigilant in all matters and should not have allowed to operate the fraud company and hoodwink the public for thousands of crores of Rupees.
More often than not Chit companies bust like the Saradha Group. The single biggest reason for it is the lack of Government audit on chit companies. The 1982 Chit Fund Act while give powers to audit accounts of Chit companies by the Registrar of companies and the Reserve Bank Of India, it does not stipulate time bound audit by them. Since the Chit Companies are collecting money from the public like Banks the R B I should be made responsible to see its proper utilisation. The fact is Government is not taking a serious view of Chit companies and their operations.
Kerala is the citadel of Chit funds and other ponzy schemes. In addition to thousands of big and small
chit fund companies there are umpteen numbers of home-grown chits too in which the neighbours join.
Though the fact of Chit companies busting here and there is known to all, it does not discourage people from joining one. There is some deep rooted conviction among people that while Banks do their business for their good, Chit funds are for the people. Some Chit companies have also started giving away prizes for persons who remit the instalment promptly and they also offer high interest for deposit of prize money.
In the case of Saradha Group, they accepted deposits from the public offering fabulous interest rates. The general public become unscrupulous when greed overtakes them and since greed for money is universal the company did not find any difficulty to collect huge sums. How much amount collected and where did the money go, no one knows except its boss, Sudipta Sen. Reports say that he was preparing for the final catastrophe as he had pulled back his son ,Subhojit, from the Board of Directors.
Now to help the investors the Government should freeze all Bank accounts of the company and of its Boss and audit the accounts. The relief package of Rs 500 Crore announced by the West Bengal Government, is quite insufficient for the number of investors in it. The Government should immediately freeze Bank accounts of the Company and find out where the collection money went. If the matter is expertly handled a major portion of money can be found in the company itself including its immovable assets.
Since the busting of Chit companies have become common, all registered Chit Fund Companies should be brought under mandatory audit by the Reserve Bank or by the Registrar charging audit fee from the Chit companies.
If, for any reason auditing is not possible it is better to ban Chit business in India and save the public from loss.