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

The 180 days time limit would be revised to give the designated courts more time for attachment of properties.

Written by Debabrata Mohanty | Bhubaneswar | Updated: August 22, 2014 5:51 pm
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.

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 Rules, 2013 would also be suitably amended for inclusion of mechanism for repayment to the depositors.

The officials said the sub-section 7 of section 9 of OPID Act 2011 would also be amended for giving preference to small depositors during repayment. Under sub-section 7, the designated court, on an application by the competent authorities (additional district magistrates), pass such order for equitable distribution among the depositors of the money attached or realized out of the sale. Of the 1 million depositors, more than 70 per cent are believed to be small depositors. Apart from the money realised from the sale of the attached properties, the government would also recoup the losses of the small investors from the Rs 300 crore corpus that it announced last year.

The Indian Express went though the attachment orders of the 14 companies and found that the firms had bought hundreds of acres of lands in Khurda, Puri, Koraput, Balasore and Mayurbhanj districts from the money that they collected from unsuspecting investors. Flourish India bought over 246 acres of land in different districts. Some like Aartha Tatwa Group even bought 40-odd flats in Bengal – the value of which would be more than Rs 20 crore.

In case of Golden Land Developers, the police froze Rs 84.5 crore kept in scores of bank accounts. The Commissionerate police of Bhubaneswar seized 11 vehicles from Artha Tatwa Group which included Bolero, Safari, Volkswagen Polo, Scorpio and a Suzuki Intruder. The Seashore Group is alleged to have duped its investors to the tune of Rs 700 crore from investors. The chief of the group, Prashant Das, labelled as Orissa’s Sudipta Sen for starting a TV channel like Saradha group was arrested from Mumbai in June last year.

Officials said that to identify the depositors and ascertain the losses incurred by them, the competent authorities would soon invite applications from the depositors in the prescribed format by a public notice in terms of Rule 6(1) of the OPID Rules, 2013. Such information would be verified by the investigating agencies who have filed the proposal for ad-interim attachment order.

For all the latest India News, download Indian Express App

  1. A
    Alok Jena
    Aug 23, 2014 at 3:37 am
    This is an open letter .Mega Thousand Crore Chit Fund Scam in Odisha & India:It Sure & learnt Navin Pattinak & his family is involved in Chit fund Scam.How AT Group Got SEBI Licence for gold Transaction.AT Group was not qualifying to apply for SEBI Licence for gold transaction.Navin knows very well who help AT group to get illegal gold transaction licences.from 25000 crores ,after getting SEBI licence AT Group suddenly shown his busyness tranzaction to 75000 crores.Before getting SEBI licecne for gold transaction Odisha govt dad given recommendation or not ?With out state recommendation SEBI would have not entertained.SEBI is sure involved in the Mega chit fund scam.Bk Sharma Most Wanted alleged Criminal as cirtial evidence says) the chief coordinate of all these crime for 9 years.Pyari mohan mahapatra(MP) ,how many times visited Dubai .& And Every one Knows he is the real promoter of SeaS group.Pyari mohan & his lawyers has been series of meetings how to save himself BK Sharma & cM in Chit Fund Scam.Greenray international done busyness more than 18 Stastes of India including Jammu & Kashmir as per repoft Evis[dence produced in the Hon'ble Court,(J&K)the law is not applicable.Greenray international directors has jumed of bail period CBI knows it.We have & mediua also wrote about it but How CBI is Acting.CBI Might be slow but use to act perfectly.succes rate of CBI is nearing 80 percent in India.Regular information fromatoin from the CBI from proper authrity should be in formed to the people which ever are posible to the press.We also know Cbi or any agency alike will not dis close the investigation.But can encourage people to give informations to CBI to help & fcil;itate in Meha Chit Fund Scam Inqurie.CBI has got enough evidence & matterialsto act.if CBI is not proper co-opration from tje govt ,humble i can suggest to pray before Hon,bleThe Court for Directions to get adiquit suppot from central investigating outsource.Pepple are ready to give information to CBI expect few senior CBI officials particularly some Odia CBI officers in Bhubaneswar discouraging informers not to be so proactive to give information in Mega Chit Fund Scam.we have got prove & witness to prove the above statement.How in final charge sheet seas is a small company & not done business out side the state CB ,CID gave affidavit in The Apex Court of The Country.BK Sharma should be immediately arrested by the CBI for his illegal support to Mega Chit Fund Operators.The poor restorers will get courage to produce more information to CBI.Many more things doents are with us.CBI should be eager to get it.it seems CBI in BBSR has not able to win the trust the informers.Hope CBI Bhubaneswar should act to keep his morale high before the Apex Court of The Country. Influential media persons were in touch in AT grup chief when he is in Jarapada Jail.CBI had given evidence /prove but CBI Bhubaneser acting in pick & chose manner.Are the media & Advocate General & BK Sharma like IPS are above the law. 'Be so high nobody is above the law" The God is Great !alok jena The Humble Peioner In the Mega CHIT FUND Scam in The Hon'ble Supreme Court .Hope Rajiv Sing IPS Jee Chief of SIT,CBI will take note of it.Regards.
    Reply
    1. M
      Milan
      Nov 1, 2014 at 11:17 am
      All the mentioned facts may true may not be. But my question is regarding punishment to agents by law. How far it is justifiable ?? they are unemplo people worked as agent and earn very little money for their survival. The company CMD taken all the money away and govt. issued licence to the companies to do so.Now 4 Year jail to a agent is not a justice at all.He is also the victim. vulnerable. instead of doing all these drama if govt. would only focus refunding money to depositors it will great. i Feel So..
      Reply
      1. M
        Milan
        Nov 1, 2014 at 11:17 am
        All the mentioned facts may true may not be. But my question is regarding punishment to agents by law. How far it is justifiable ?? they are unemplo people worked as agent and earn very little money for their survival. The company CMD taken all the money away and govt. issued licence to the companies to do so.Now 4 Year jail to a agent is not a justice at all.He is also the victim. vulnerable. instead of doing all these drama if govt. would only focus refunding money to depositors it will great. i Feel So..
        Reply
        1. M
          Maheswar Deka
          Sep 15, 2014 at 4:26 pm
          The chit funds in India have been able to flourish because depositors are lured by the higher interest rates on the deposits they deposit.The depositors normally trust the chit funds.But, few chit funds are duping the depositors.So, government should ban chit funds in India
          Reply