Chit fund firms raised Rs 70,000 crore,says I-T

With various agencies at work trying to measure the enormity of the chit fund scam in West Bengal,the Investigative Wing of the Income-Tax department

Written by Madhuparna Das | Kolkata | Published: April 27, 2013 3:31:00 am

With various agencies at work trying to measure the enormity of the chit fund scam in West Bengal,the Investigative Wing of the Income-Tax department in Kolkata has estimated that money raised from people by nearly 800 chit fund firms operating in Bengal is a whopping Rs 70,000 crore.

Like the Securities and Exchange Board of India (Sebi),the department had warned the state about dire consequences if it failed to act and stop these operations. However,it says the scam is much bigger.

The I-T department sent its findings through “official communications” to other central agencies as well as the West Bengal government. The reports were dispatched in instalments since July 2011. The first instalment of the investigative report on five chit fund companies reached the state government and the Union Finance Ministry with copies marked to Sebi and the Reserve Bank of India as well in July 2011,said a senior official of the department. However,both the state and central governments sat on the department’s report,it was learnt.

The department had raided offices of five major chit fund firms as “test cases”,which revealed major “financial anomalies”. Of these,four were Kolkata-based companies and one was based in Burdwan. Interestingly,one of the five companies taken up by the department as “test cases” was the Saradha Group,which did not file its income-tax returns for the last three years. When it was served notices,it paid provisional taxes.

According to officials,the company subsequently filed three different balance sheets to three agencies including the Registrar of Companies,the I-T department and the banks concerned. “It was a criminal offence under the companies Act,” said a top official on condition of anonymity.

Sebi officials confirmed that the audit firm of the Saradha Group is now being also investigated. When contacted,a senior official of Bidhannagar Police Commissionerate investigating the Saradha Group case confirmed that the audit firm in question will be called for questioning.

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