West Bengal Chief Minister Mamata Banerjee is visibly enraged with back-to-back arrests of two Trinamool Congress (TMC) Lok Sabha MPs — actor Tapas Pal and Sudip Bandyopadhyay. While Pal was arrested on Friday last, TMC leader in Lok Sabha, Bandhopadhyay was arrested on Tuesday by CBI in connection with the Rose Valley chit fund scam. Banerjee dubbed the arrests as a vendetta by BJP chief Amit Shah and Prime Minister Narendra Modi because TMC has opposed the demonetisation decision of the Central government. “We strongly condemn the political vindictive attitude of Narendra Modi and Amit Shah. For no reasons arrests have been made. Only reason is #NoteBandi,” Banerjee tweeted on Tuesday.
The arrests have, however, put the focus back on multi-crore ponzi scams, including the Rose Valley case, in West Bengal under Banerjee’s nose. The scams forced many gullible poor people to commit suicide and destroyed lives of scores of others.
Here we take a look at the Rose Valley scam, why TMC MPs have been arrested and why Mamata Banerjee is enraged.
What is Rose Valley?
Rose Valley Hotels and Entertainment Ltd (RVHEL) company was set up in the 1990s by a person named Kajal Kundu, who had started his career as a LIC agent. The company prospered in a very short time. Kajal and his family were killed in a car accident during their visit to Tripura in 2003. The busines was then taken over by Kajal’s brother Gautam Kundu. According to The Indian Express, Gautam was famous for this flamboyant life style and his love for expensive cars. There were also rumours of foul play in the death of Kajal and his family. However, the company continued to scale new heights.
What was Rose Valley’s business all about?
According to IE, Rose Valley offered a holiday membership plan that promised customers a stay at one of the plush resorts of the company after the expiry of the term. As the popularity of the scheme increased and money started pouring in from customers, the company got involved in a number of businesses including construction, hotels and films. It also sponsored Durga Pujas across Kolkata and also IPL team Kolkata Knightriders once.
As per the probes so far, the RVHEL launched a scheme called “Rose Valley Holiday Membership Plan in 2010.” The scheme offered people an opportunity to buy a holiday package on a monthly instalment basis. After the completion of the tenure of the scheme, the investors could either opt for a holiday or get a return on the investment with annualised interest.
The Securities and Exchanged Board of India (SEBI) clamped down on the company in 2013. It found the company offered interest rates ranging from 11.2% to 17.65%. Moreover, the investors couldn’t cancel their subscription before the expiry of the tenure.
For no reasons arrests have been made. Only reason is #NoteBandi 2/3
— Mamata Banerjee (@MamataOfficial) January 3, 2017
We strongly condemn the political vindictive attitude of Narendra Modi and Amit Shah 1/3
— Mamata Banerjee (@MamataOfficial) January 3, 2017
Who all have been linked to the scam?
Personalities from entertainment industry including Tapas Paul and now BJP MP Babul Supriyo, several politicians including chief minister of Odisha Naveen Patnaik and his Tripura counterpart Manik Sarkar.
How big is Rose Valley Scam?
When the chit fund scams were unearthed for the first time, the Saradha Scam hogged the limelight. However, it is believed that Rose Valley is a bigger scam, estimated to be worth Rs 17,000 crore.
What exactly is the Rose Valley Scam?
According to a Sebi estimate, Rose Valley raised over Rs 10,000 crore without any approval and registration with the market regulator. Around February 2012, when Sebi started its probe into the company’s scheme, Assam Police registered a case against Rose Valley for collecting Rs 1,006 crore through the holiday membership scheme until February 2012.
CBI later accused chairman Gautam Kundu and three others of defrauding investors from across the country to the tune of over Rs 17,000 crore.
What was TMC’s role in the rise of chit fund companies like Rose Valley and Saradha?
At one point of time, TMC MP Sudip Bandyopadhyay was a director in one of the Rose Valley companies. He is said to have family ties with Gautam Kundu. Another TMC MP Tapas Pal and his wife were also on Rose Valley’s Board of Directors.
Pal had written a letter to then Finance Minister Pranab Mukherjee In 2010. In the letter, Pal had written about rapidly spreading ponzi scams in West Bengal. However, he had not mentioned Rose Valley, according to IE.
TMC leaders linked to Saradha Scam
TMC MP Srinjoy Bose had to resign from his Rajya Sabha seat, while Kunal Ghosh had to spend around three years in jail. Ghosh was released on bail before Diwali last years. Claiming that he was framed, Ghosh had accused several TMC leaders, including Chief Minister Mamata Banerjee of being involved in the scam.
During the 2014 Lok Sabha election campaign, PM Modi Modi had alleged that Saradha promoter Sudipta Sen had purchased one of Banerjee’s paintings for Rs 1.8 crore. However, both TMC and Sen denied.
Actor Mithun Chakraborty, who recently resigned his Rajya Sabha seat due to health reasons, returned Rs 1 crore that he had received from Saradha company after the scam broke. Another Trinamool MP Arpita Ghosh was also questioned by investigations.
What is TMC’s clarification on Saradha scam?
TMC claims that activities of Saradha were spread beyond West Bengal and had beneficiaries across several parties. Moreover, the Company had started functioning during the Left Front rule.
What is the status of probe into Rose Valley and Saradha scams?
The twin scams are being investigated by the CBI and ED separately. Gautam Kundu was arrested earlier in connection with the Rose Valley scam by ED. According to IE, CBI has so far filed six charge sheets in connection with the Saradha case. The charge sheets have named several people including Kunal Ghosh, West Bengal minister Madan Mitra, Srinjoy Bose and Sudipta Sen. The CBI has also filed one charge sheet in the Rose Valley case, naming Kundu and two other directors.
Why Mamata Banerjee is enraged
Banerjee claims that her party is being targetted for protesting against demonetisation. “I just can’t think that Sudip Bandyopadhyay, who is our party’s leader in the Lok Sabha, would be arrested. I also have information that Modi wants to arrest many other TMC leaders like Abhishek Banerjee, Sovan Chatterjee (city mayor) and Firhad Hakim (minister),” she was quoted as saying by PTI on Tuesday.
“I am shocked, but not scared. Let him arrest all of us. I openly challenge him to arrest me… He may silence others, but not me. He can’t suppress our voice. He can’t bulldoze people’s voice,” she said. “We will fight a legal battle in every case,” she said.
Banerjee also expressed support for Bandhopadhyaya, saying, “The party is behind Sudip. He has not done anything wrong. Even if he is in jail, the people of Bengal will keep him in their heart.”
(With inputs from agencies)