The Enforcement Directorate, probing the Rose Valley chit fund scam, will file its first chargesheet on Thursday, official sources said.
The 50-page chargesheet is the outcome of the agency’s year-long probe into the complaint filed by the market regulator SEBI in April last year after the latter discovered “illegal debentures” issued by the firm to over 1,000 investors — “most of them fictitious” — amounting to nearly Rs 13 crore.
The ED is likely to name in its chargesheet the group’s chairman, Gautam Kundu, the “principal beneficiary” in the scam whom the ED arrested on March 25 and who was remanded to 10 days of jail custody on Tuesday. The agency will also list the size of Rose Valley empire which has collected nearly Rs 15,000 crore from the market duping lakhs of investors besides the names of “non-existent” debenture holders, sources said.
The extent of the collection notwithstanding, the ED has termed the SEBI case against Rose Valley Group as “the smallest” of the five cases against the firm which had ventured out in the areas of tourism, hospitality and media. The ED is simultaneously investigating into four other cases against the group filed by the state governments of Orissa, Tripura, West Bengal and Assam.
In April last year, the SEBI looked into the documents submitted by the Rose Valley Group before the Registrar of Companies and upon finding “gross irregularities” filed a complaint with the ED.
As the ED initiated its probe, it learnt that the firm had issued 1,165 debentures to private investors. It then randomly issued summons to around 30 of them of whom only 5 turned up. The ED’s sample survey of these 30 investors revealed that, barring five, all names and addresses were “fictitious.”
Sources further added that the company “laundered black money” and created accounts or issued debentures in the name of “fictitious people” to convert the black money into white.
Holding Kundu as the “principal beneficiary” and the “main conspirator,” the ED arrested the chairman on March 25 after he refused to give necessary documents related to his firm. Kundu, in an attempt to evade legal action, then filed 11 petitions in several high courts, including Delhi, Calcutta, Patna and Guwahati, against the actions taken by the investigating agency.
The courts, however, ruled the judgments in favour of the agency which prompted it to arrest Kundu who failed to explain the financial transactions.
The ED had already frozen 2800 bank accounts and fixed deposits of the Rose Valley Group and attached cash worth Rs 296 crore.