Thursday, Nov 27, 2014

Wary of chit fund scam fallout, Naveen govt plans to amend law

After the chit fund scam broke in early 2011, the Naveen Patnaik government enacted the OPID Act 2011 which had the provision of selling the properties of ponzi firms for repaying the defaulted depositors. After the chit fund scam, the Patnaik govt enacted the OPID Act 2011 which had the provision of selling the properties of ponzi firms for repaying the defaulted depositors.
Written by Debabrata Mohanty | Bhubaneswar | Posted: August 22, 2014 5:44 pm | Updated: August 22, 2014 5:51 pm

Wary of the fallout of the anger of small depositors who were duped of their savings by ponzi firms operating in the state, the Orissa government is now planning to bring an amendment in the Orissa Protection of Interests of Depositors (in financial establishments) Act 2011 to enable it to pay them back.

The government move seems to have been triggered to contain a negative fallout of the chit fund scam on Naveen Patnaik’s image as CBI – which is now investigating 43 chit fund companies in Orissa – is conducting raids on the homes of several BJD MPs and MLAs. The CBI has recovered Rs 28 lakh in cash from BJD MP Ramchandra Hansda and raided the house of former party chief whip Pravat Tripathy last week. The agency is likely to take a few BJD politicians in custody for more interrogation.

After the chit fund scam broke in early 2011, the Naveen Patnaik government enacted the OPID Act 2011 which had the provision of selling the properties of ponzi firms for repaying the defaulted depositors. Going by the affidavits submitted before the justice RK Patra Commission, which is probing involvement of influential persons including politicians and bureaucrats in the chit fund scam, the number of duped depositors in Orissa could be more than 1 million. In Orissa chit fund firms collected around Rs 4,600 crore by defrauding the people.

Government sources told The Indian Express that last week finance department officials and economic offences wing of Criminal Investigation Department in a meeting decided to amend sub-section 6 of section 9 of OPID Act, 2011 through an ordinance. The amendment is being deemed necessary as it is apprehended that future legal complications may arise as under the same sub-section, the designated courts are required to pass an order within a period of 180 days from the date of application by the designated authorities for attachment of the properties of the ponzi firms.

So far the movable and immovable properties of 14 such ponzi firms running into a few thousand crores have been attached by the CID, the Bhubaneswar Commissionerate Police and some district superintendents of police under section 3 of OPID Act. The ponzi firms whose properties have been attached are Saradha Group, Artha Tatwa, Seashore Group, Astha Group of Companies, Nabajyoti Realty, Green Ray International, Ashore Group of Companies, SLB Multi State Cooperative, Sastra Enterprises, Safex India, Golden Land Developers, Rose Valley Group and Flourish India.

An official said the 180 days time limit would be revised to give the designated courts more time for attachment of properties. The OPID continued…

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