Bengal Chit Fund Probe: Is Delhi CBI ‘Blocking’ Kolkata’s Efforts?

Why is the CBI headquarters in Delhi seemingly putting a spanner in the works of its Kolkata counterpart?

Image of Mamata Banerjee and logo of the CBI used for representational purposes.

(Photo: Erum Gour / The Quint)

Following the arrest of four leaders of her party, the Trinamool Congress (TMC), on 17 May, West Bengal Chief Minister Mamata Banerjee reached the Nizam Palace office of the Central Bureau of Investigation (CBI) in Kolkata, and dared the agency officials to arrest her too. But perhaps unbeknownst to her, the agency first planned to question her in connection with its chit fund ‘scam’ probe in the summer of 2019.

Later in February 2020, the agency wanted to chargesheet her, and both times the Kolkata branch of the agency was not given an unambiguous approval — by the Delhi headquarters — to move ahead.

Senior TMC leader and MP, Lok Sabha, Saugata Roy told The Quint: “I can't comment on this matter; to me, it’s all hearsay and speculative. And moreover, the chit fund scam is basically the failure of central regulatory authorities like SEBI, RBI and SFIO. The standing committee on finance, in its report, also pointed out the lapses on the part of the central regulatory authorities. And as far as the Narada case is concerned, the CBI doesn't have a case as the agency has not been able to prove money transactions to make out a corruption case against public servants.”

The story is pieced together with the details of file movement between the Kolkata branch of the agency and its headquarters in Delhi, and from officials who were privy to the decisions taken in this regard.
A detailed questionnaire to the CBI remains unanswered.

What Happened to Kolkata CBI’s Detailed Questionnaire for Mamata in 2019?

The issue of questioning Mamata Banerjee — who won the state assembly elections for the third time in a row with a stupendous margin — in one of the cases related to the chit fund ‘scam’, was first debated in the Kolkata branch of the CBI which was dealing with the probe in the summer (June) of 2019.

“The investigating team was convinced that they had enough material on record that required questioning of the chief minister in the matter. Therefore, the Kolkata branch sought approval of the agency headquarters in Delhi, since the case was being monitored at the level of the CBI chief, to question Banerjee,” said an official briefed on the details of correspondence in this regard, to The Quint.

Expecting a quick approval from the headquarters, the Kolkata branch was ready with a questionnaire for Mamata Banerjee, consisting of almost 150 questions. “But there was no reply from the headquarters on the matter till December 2019,” added the official.

“And when the reply came, it left the investigating team a bit confused. In its reply, the then director Rishi Kumar Shukla asked the investigating team to continue with its probe and ‘finalise’ it,” noted the same official.

Nonetheless, the Kolkata investigators decided to adhere to the “directions” from the headquarters and managed to ‘finalise’ the probe by February 2020.

No Finality to ‘Finalising’ the Bengal Chit Fund Probe

“The direction to ‘finalise’ the probe in effect means laying down a chain of evidence to prosecute the accused persons,” the official told this journalist for The Quint.

He added:

“Finalising the probe, the Kolkata branch, this time, sought approval to prosecute Mamata Banerjee in at least one chit fund case along with others. But again there was no immediate reply from the headquarters. Rather, this time, the delay in response from the headquarters was much longer. The Kolkata branch got to know the fate of its request by end-December 2020, following an evaluation of the request by the agency’s law officers. The director, on the concurrence of law officers of the agency, asked the Kolkata branch to take the ‘defence’ of Banerjee, given the ‘new evidence’ that had come on record in the matter. Seeking defence meant questioning the chief minister, but this was surprising since the branch had sought approval for questioning the CM over a year ago, and it was asked to finalise the probe. Now it was seeking approval to chargesheet her as it had ‘finalised’ probe as per the earlier directions of the headquarters. The reply from the headquarters again put a spanner in the works of the Kolkata branch for 10 months.”

How CBI’s Probe Came to a Standstill

Rishi Kumar Shukla, the then CBI chief who retired in February 2021, refused to say anything on the matter when The Quint reached out to him via telephone.

After the new directions from the CBI chief, there was no further movement on the case as the state went into election mode. Now that the polls are over and Mamata is back in the saddle, there is no regular chief to take a further call on the matter. Since Shukla’s retirement, Praveen Sinha, a 1988 batch IPS officer of the Gujarat cadre, is heading the agency as the acting director.

A high-powered committee consisting of the prime minister, the leader of the opposition in the Lok Sabha, and the chief justice of India, met on 24 May to finalise a name for the CBI chief.

Saradha Group & Rose Valley’s Scams

Ponzi companies like Saradha and Rose Valley illegally collected money from common citizens in West Bengal and other parts of the country. Despite many complaints against these companies, no criminal case was registered against them initially. In April 2013, the main promoters of the Saradha Group, Sudipta Sen and Debjani Mukherjee, fled Kolkata and were finally arrested from Sonmarg in Jammu & Kashmir on 22 April 2013.

A public interest litigation (PIL) was filed in April 2013 before the Calcutta High Court, seeking a CBI probe into the case. The petition alleged that Sudipta Sen was seen with several “ruling (in West Bengal) party associates”, who distanced themselves from him when he was absconding.

The petition alleged that the authorities are moving slowly with an attempt to shield all those who were involved in the scam. On 16 April 2013, an FIR against the Saradha Group was registered at the Electronic Complex Police station failing under the Bidhannagar Police Commissionerate where Rajiv Kumar was posted as commissioner since January 2012.

On 26 April 2013, the West Bengal government issued a notification constituting a special investigation team (SIT) to probe the chit fund cases, and Rajiv Kumar was made a member of the SIT and was also asked to look after its day-to-day functioning.

The overall head of the SIT was the West Bengal Director General of Police. But in May 2014, the Supreme Court ordered the transfer of all the cases related to the chit fund ‘scam’, registered at different police stations in West Bengal and Odisha, to the CBI.

Bengal’s Ponzi Pyramid

There were around 270 ponzi companies operating in West Bengal once upon a time, but of them, two — Saradha and Rose Valley — were most significant according to the CBI, as they collected Rs 2450 crores and Rs 17367 crores, respectively.

During 2012-13, the Saradha Group illegally collected Rs 805 crores before its collapse, and Rose Valley collected Rs 4329 crore in 2012-13 and Rs 2536 crore in 2013-14. The collection in the year 2013-14 is more curious, as by then, the Saradha scam was already out in the open.

The CBI, in one of its petitions, told the Supreme Court that the Rose Valley group continued to operate illegally in 2013-14, and managed to collect Rs 2536 crore despite a public outcry against ponzi companies, which had resulted in the West Bengal government constituting an SIT to probe the affairs of these companies.

(Rajesh Ahuja is a journalist for over two decades. He is also one of the co-founders of Pixstory, a new age social media platform. He tweets @iamrajeshahuja. This is an opinion piece, and the views expressed are the author’s own. The Quint neither endorses, nor is responsible for them.)