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Bihar’s Srijan Scandal part II: At heart of Srijan scam is rise and rise of its founder

Bihar Srijan scam: 20 years ago, Manorama Devi started with 2 sewing machines, 1 room

Written by Santosh Singh | Bhagalpur |
Updated: August 22, 2017 9:39:10 am
Bihar NGO scam, ngo scam, srijan scandal, srijan founder manorama devi, srijan ngo scam, Srijan Mahila Vikas Sahyog Samiti Limited, bhagalpur ngo scam, bihar govt, bihar news Manorama Devi’s house at Vikramshila Colony in Bhagalpur. Express Photo by Santosh Singh

From two sewing machines in a one-room rented house in Bhagalpur 20 years ago to an influential cooperative society with over 6,000 members, 60 staff and office premises spread over 24,000 sq ft on government land.

The rise of Manorama Devi, founder of Srijan Mahila Sahyog Samiti Ltd, since 1996 was nothing short of spectacular. On February 13, Devi died of illness at the age of 65 and her organisation is now in the dock for allegedly conniving with government officials and bank employees to siphon off Rs 700 crore of welfare funds by fudging records over the last 10 years.

On Thursday, the Bihar government ordered a CBI probe into the scam, following nine FIRs and 12 arrests registered by state police in the case. But an investigation by The Indian Express shows that at the heart of the scam is the tale of its founder itself, who operated right under the government’s nose, sharing the stage with ministers and flaunting her links to senior bureaucrats, businessmen and politicians.

So much so, that she came to be known as “Srijan Didi”.

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Today, Devi’s daughter-in-law Priya Kumar who took over Srijan this year, is on the run, along with her husband Amit Kumar, who runs a finance coaching centre in Bhagalpur.

“Now we know the reason behind her growth. We used to wonder how an organisation selling incense sticks, bindis and pickles could make people so rich,” said a resident of Vikramshila Colony in Bhagalpur’s Sabour town, the site of Devi’s four-storey mansion. District officials say that when Devi fell ill in 2016, an air ambulance was called to Bhagalpur to take her to Delhi for treatment.

According to police records, Devi’s journey started in 1996 when, as an undergraduate, she set up Srijan to empower women. Officials say she “meticulously” worked on the “symbol of women empowerment”, riding the boost given by Nitish Kumar’s NDA government of 2006 to self-help groups across the state.

Police officers now suspect that Srijan’s official list of activities, such as preparing sattu (roasted gram), bindis, incense sticks, pickles and spices, could have been a cover. They say they are investigating charges that the cooperative society enrolled the relatives of bureaucrats as members, giving them “heavy loans”, far above the limit of Rs 50,000.

Police records show that one such case being probed is that of a loan of Rs 8 lakh allegedly given to the wife of a Bihar Administrative Service (BAS) officer “for buying a Harley Davidson motorcycle”.

“All the big businessmen in Bhagalpur would be at the beck and call of Manorama Devi. But no one sought to know how the head of an organisation with an annual turnover of less than Rs 1.5 crore could command such respect and awe,” said police sources linked to the investigation.

“I have seen at least three senior officials touch her feet to show their respect,” said a resident of Sabour.

How 2003 marked turning point

Devi hails from an upper caste Kayasth family at Navgachhia in Bhagalpur and moved to Sabour after the death in 1991 of her husband, Awadhesh Kumar, a principal scientist at the Indian Lac Research Institute in Ranchi, which is now known as the Indian Institute of Natural Resins and Gums. Her father was a former principal of Sabour Agriculture College.

Police sources say Devi took on the responsibility of her three sons and two daughters and started a stitching centre for women with two employees. Soon, they say, she tied up with a local doctor’s wife to expand her network, borrowed Rs 40,000 “from the market” and started selling handicrafts, salwar suits and saris.

Bihar NGO scam, ngo scam, srijan scandal, srijan ngo scam, Srijan Mahila Vikas Sahyog Samiti Limited, bhagalpur ngo scam, bihar govt, bihar news The office of NGO Srijan at Sabour in Bhagalpur. Express Photo by Santosh Singh

The year 2003 was crucial for Devi, say police sources. That was when K P Ramaiah took charge as the District Magistrate of Bhagalpur and launched several schemes to promote cooperative initiatives. “Citing a government scheme, the DM announced a subsidy of 50 per cent for purchasing sewing machines. Srijan purchased 1,000 machines from a vendor, who now runs one of the biggest electronic showrooms in Bhagalpur. These machines were given to 1,000 women, who were enrolled as members. This was how Manorama Devi became a known face here,” said an official posted at the Bhagalpur DM’s office.

“Later, she cultivated links with bureaucrats banking on her image as a rising entrepreneur working to uplift women. In 2005, she started a cooperative bank, which was not affiliated to the Central Cooperative Bank of Bhagalpur. The district administration opened branches of the CCB in all blocks of Bhagalpur, except Sabour,” said police sources.

Sources close to the Srijan management say Devi’s influence started spreading rapidly after the bank was set up.

“At the time, Sabour had only one nationalised bank and people started flocking to Srijan without knowing that it was not a full-fledged bank. In 2006, an official from the state cooperative department arrived for an inspection but Devi got him to talk to a senior official and the matter came to rest. By 2007, she had started giving heavy loans to the market at an interest rate of 16 per cent,” said sources close to the Srijan management.

One case that police sources point to is that of local BJP leader Bipin Sharma, who was sacked as the party’s state vice-president after he came under the scanner for his alleged proximity to Devi. “He started off as the owner of a small shop but now owns five showrooms of branded footwear and clothes in Bhagalpur,” they said. Sharma was not available for comment.

Speaking to The Indian Express, Bhagalpur SSP Manoj Kumar said, “One startling revelation that has emerged during investigations is that government money under different heads would be directly deposited with Srijan in outright violation of banking norms. This was discontinued after the DM issued an order in 2008 to deposit government funds in nationalised banks. By then, we suspect, Srijan could have accumulated a lot of money in interest.”

READ | How a Bihar NGO siphoned off crores in govt funds under govt nose — with some help

More officials could face heat

Another police officer linked to the investigation said several senior officials in the state “could face the heat” once the CBI begins its probe.

“We suspect that Devi invested a lot of money in real estate and other businesses through conduits and dummies. This is hard to establish, which why the district police may not have been able to take the investigation beyond a point,” said the officer.

The Indian Express had reported on Saturday that the key to the scam were two methods: direct deposit of government funds to Srijan’s accounts through fake third-party endorsement and via duplicate cheques with forged signatures.

“Let the forensic department examine the signatures of some of the DMs on these cheques. We suspect some of them would turn out to be genuine. But it is now up to CBI to take the investigation further,” said the officer.

On Saturday, Bhagalpur police detained three persons — former district cooperative officer Pankaj Jha, former central cooperative bank manager Sudhanshu Kumar Das and bank staffer Vijay Kumar Gupta for allegedly transferring Rs 48 crore from the cooperative department’s fund to Srijan. “We have detained them for questioning. If we are not satisfied with their answers, they could be arrested,” said SSP Kumar.

Apart from daughter-in-law Priya, whose father is Jharkhand Congress’s vice president Anandi Brahma, and her husband Amit, police sources say Srijan was being run by a chartered accountant P K Ghosh, auditor Satish Chandra Jha, who has been arrested, and staffer Bansidhar Jha. Devi’s second son Pranav Kumar is a doctor in Australia — a third son died in an accident a few years ago – and her two daughters are married.

According to former employees of Srijan, Devi had once claimed that she decided to name her organisation “Srijan” after meeting victims of the communal riots of 1989 at Chanderi village in Bhagalpur. At the time, Devi is said to have declared: “After all, Srijan (creation) takes place after pralay (destruction).”

Tomorrow: How red flags raised by RBI, whistleblower were ignored

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