There is no dearth of those who said that K. D. Singh is the leader of the ‘chit fund pack’ in Trinamool Congress. His Alchemist, through alleged “back-door” acquisition of many Bengal chit funds particularly those considered close to Trinamool links, has become a power to reckon with. There has been no serious enquiry into this “chit fund business” though the Central Government declared in Parliament that it would do so.
By DA Special Investigation Team
Now that Trinamool Congress leader Mamata Banerjee has finally divorced the UPA II government, the question is why she did it. Sources say that the real reason for her pullout from the Manmohan Singh government is quite different from her stated sympathy for the common man.
Her own party leaders say, on condition of strict anonymity, that the “real problem” between her and the UPA government came to a head on August 26, 2012. On that day, R. P. N. Singh, Minister of State for Corporate Affairs, said that investigation was under way into the affairs of 87 chit funds operating under the garb of Multi-Level Marketing (MLM) companies. (see the Box for details) It is alleged by her opposnent that Ms Bannerjee, in her twin capacity of West Bengal Chief Minister and supreme leader of TMC, UPA II’s second largest partner after Congress, has been using her clout to protect from investigation the chit funds in her state. Though there is no evidence on the ground to establish close nexus of these chit funds with her. It is said that the list of 87 chit funds under scanner includes those very close to her.
The TMC was worried by R. P. N. Singh’s announcement that the Serious Fraud Investigation Office (SFIO), which has been given responsibility of the investigation, was now pushing for a Central Regulatory Authority for strict implementation of Prize Chit and Money Circulation Schemes (Banning) Act 1978. West Bengal, a state rated high for small savings, has become a happy hunting ground of chit funds that dupe ordinary savers by offering them high returns, and then disappearing one fine morning. It is the state government’s responsibility to enforce the PCMCS Act, but police under the Trinamool government is notorious for looking the other way when complaints come in.
Alchemist and Saradha
Of the chit funds favoured by Bannerjee, the weightiest is Alchemist, owned by Trinamool Rajya Sabha member K. D. Singh, it is alleged by her opponents. It is said is some knowledgeable quarters that Alchemist has obtained controlling stakes in Saradha through some of his other companies. It is no secret that Saradha is close to the Chief Minister. After Bannerjee came to power in West Bengal, Saradha began acquiring an increasingly high profile.
Saradha first established a close relation with ‘Pratidin,’ a loss-making Bengali daily. Last year, after Saradha acquired sufficient control over Pratidin, Srinjoy Bose, its founder-owner’s son, got elected to Rajya Sabha as Trinamool Congress candidate. Though Pratidin remains under Bose, it is getting booster from certain sources connected to chit fund companies. Soon thereafter, Kunal Ghosh, Saradha agent wearing double hat as executive editor of ‘Pratidin’ and chief executive of Saradha’s media-related businesses, also entered the Rajya Sabha with “didi’s” blessings. By then Saradha had established a close financial relationship with two old Kolkata papers, “Sanmarg” in Hindi, and “Akhbar-E-Mashriq” in Urdu. Their controllers, Vivek Gupta of “Sanmarg” and Nadimul Haque of the “Mashriq”, also found their way into the Rajya Sabha as Trinamool members.
The ‘chit fund rags’ may have influence and control over media houses running newspapers and TV channels enjoying at least some protection from possible raids by law enforcement agencies.
The Chit Fund Pack
K. D. Singh’s sudden rise in the TMC is attributed to his contribution to these ‘chit fund pack’ of the party in West Bengal. His Alchemist, through alleged acquisition of many Bengal chit funds, and because of Trinamool links, has become a power to reckon with. There has been no serious enquiry into his source of fund and its nature of deployment. Now that the Central Government may undertake one, the truth will be out. Efforts to get K D Singh failed.
He has a chicken retail chain called Republic of Chicken. Yet he has become a member of the National Meat and Poultry Processing Board under the Food Processing Ministry, thanks to the Union Tourism Minister, Subodh Kant Sahai, who is the least bid bothered about such conflict of interest. Moreover, both Sahai and Singh are MPs from Jharkhand and both shared their past in the shadowy Jharkhand Mukti Morcha (JMM) party.
It was Congress MP from Malda (South) A. H. Chaudhury (brother of the late A. B. A. Ghani Khan Chaudhury) who was the first to blow whistle on the chit funds. When Ghosh’s name was first heard as a probable Trinamool candidate for Rajya Sabha, Chaudhury wrote to Prime Minister Manmohan Singh cautioning him about Ghosh being a chit fund agent and the anti-people activities of these funds. There were media reports that Bannerjee had then interceded on Ghosh’s behalf by calling Ahmad Patel, political secretary to UPA Chairperson Sonia Gandhi, and seeking his help. It was because of her clout that Prime Minister desisted from acting on Chaudhury’s letter officially.
Voices Against Chit Funds
Soon, Somen Mitra, this time a Trinamool MP and a senior leader, wrote to the Prime Minister saying “these chit funds are collecting deposits mostly from guileless rural and semi-urban public…luring them with the promise of sky-high return”. He further wrote that “these chit funds do prosper with patronage of politicians who have even helped some chit-fund owners to enter the illustrious House of Parliament”. And now Sadhan Pande, the state’s Consumer Affairs Minister, has written to Union Corporate Affairs Minister Veerappa Moily to bring under control “unlisted companies…(which) are raising funds without any proper scrutiny”.
People involved in microfinance, and are thus conversant with the state’s money market at the lower level, estimate that chit funds mobilize at least Rs 60,000 crore annually, and it is growing. If Banerjee is so concerned about the poor that she’d pull down the government at the Centre rather than allowing FDI in multi-product retail, she should first free herself from the clutches of chit fund operators. For they can make the savings of poor men in her state vanish.
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