As the Serious Fraud Investigation Office of the Ministry of Corporate Affairs, Enforcement Directorate and West Bengal Police investigate the Saradha chit fund scam, in Orissa the CBI has just started its probe into a Rs 578-crore chit fund scam that was unearthed in July 2009 in the coastal district of Balasore.
In July 2009, the police had busted a chit fund scam involving several companies and multi-level marketing companies in the district after a investor complained that he had been duped by Fine Indisales Pvt Ltd, run by one Nasir Khan, who produced a Hindi movie, Shadow, the same year. As more and more people came forward to complain, the case was handed over to Orissa’s Criminal Investigation Department a month later.
Though the CID initially estimated the fraud to be worth Rs 191 crore, after months of investigation, it was found that Fine Indisales had duped 2.43 lakh investors all over India and the scam involved Rs 578.22 crore.
In 2011, Bangalore-based All India Networkers Welfare Trust filed a writ petition in the Orissa High Court demanding a CBI probe into the case. On December 12 last year, the HC ordered the CBI to probe the case. On March 1, a case was registered with the Economic Offences Wing of the CBI’s Kolkata office.
Fine Indisales duped investors through pyramid style marketing which involves an internal re-distribution of wealth from new to old entrants. It operated with special offers of 1 per cent return on the investment on a daily basis for the next 10 months. If one deposited Rs 10,000, he was promised Rs 100 per day to his/ her account automatically. Not just illiterate people, even bureaucrats, police officers and defence personnel invested in the scheme.
The CBI has asked the state government to spare the CID officer who had initially probed the case. The CID has filed two chargesheets in the case. The CBI, which filed an interim status report before the HC last month, will file its second report in June.