Odisha Sun Times Bureau
Bhubaneswar, Oct 3:
The Odisha government was very much aware of the operations and modus operandi of the chit fund companies since 2004. There is sufficient documentary evidence now to show the government had deliberately allowed these companies to go ahead with their shady business in the state.
The state Home department in a letter to the Crime Branch police on April 27, 2004, had asked it to keep a watch on the functioning of 16 non-banking financial companies (NBFCs)/chit fund companies along with a list of 42 companies whose applications for certificate of registration had already rejected by the Reserve Bank of India (RBI).
But this early warning was either ignored or not taken seriously by the state government.
Then on July 23, August 3 and August 11, 2010, the Reserve Bank of India (RBI) had written to the Crime Branch to CB to take action against controversial ponzi schemes operated by three non- banking financial companies (NBFC)- Royal Vision Care, Shastra Enterprises Limited and A M Finance- in Odisha. In these three letters, The deputy general manager of RBI M Sinha asked the agency to investigate the matter and take action.
However, for some strange reasons, the CB sat over the matter until July 2012 when it finally chose to probe only one of them- the Shastra Enterprises Limited and arrested four persons, including the CMD of the company on charges of duping investors of nearly Rs 5 crore at Baripada.
Shastra Enterprises Ltd. is among the 44 chit fund firms being probed by the CBI under directions from the apex court.
It is important to note that on February 14 and then on March 22, 2011, the state government was apprised of the huge financial irregularities of the Seashore Group of Companies by the Central Economic Intelligence Bureau (CEIB) of the Union Ministry of Finance.
But the state Crime Branch took up the investigation at long last in May 2012, a year after the then chief secretary in a letter directed it to probe the matter in May 2011.
On May 9, 2012, the CB asked a DSP-rank officer to probe the matter and a full-fledged inquiry into the financial fraud by the Seashore Group began two months later, in July 2012.
The fact that the state government consistently ignored all alerts and inputs from the Central agencies between 2004 and 2011 points to its direct involvement in the ponzi racket. Far from taking action against the chit fund operators, the ruling party politicians including the chief minister and senior officers had gone out of their way to promote at least some of them.
The ongoing CBI probe into the massive fraud perpetrated on lakhs of innocent depositors in Odisha, being done under the vigilant eyes of the apex court, can ill-afford to overlook the active government patronage and protection provided to the ponzi firms.