Opposition turns Ponzi heat on government
The central agencies under which certain cooperative bodies were registered should also shoulder the responsibility
Aug 27, 2013
Source : The Times of India


BHUBANESWAR: The state assembly on Monday witnessed a marathon debate on the chit fund scam, with the opposition alleging that at least four cabinet ministers of the Naveen Patnaik government were involved in it. The oppsition also said two prominent BJD leaders were involved and sought a CBI inquiry to unravel the truth.

Claiming that the scam was worth 50,000 crore, affecting 20 lakh depositors, Congress members trained their guns on the chief minister and some ministers, accusing them of acting as 'brand ambassadors' of some ponzi companies. They blamed the ruling BJD for suicide by three investors and agents ostensibly because of high stress after the fraud came to the fore.

Official reports said chit fund companies defrauded 6.5 lakh people of Rs 4,375 crore between January 2011 and June 2013. Police have acted against 127 firms, filed 280 cases and arrested more than 300 people for their alleged role in the scam.

Leader of opposition Bhupinder Singh alleged that the government was shielding bigwigs involved in the fraud and reiterated his demand for a white paper on the scam. He cited a writ filed in the Supreme Court, pertaining to the scam, and said the names of four ministers and a BJD MLA were named as beneficiaries. "Let the government clarify its position on this," he demanded.

Congress whip Prasad Harichandan said the government had not acted against the defrauding companies. "During the last 10 years there has been massive loot of depositors' money. This could not have taken place without the government's involvement," he said during the debate.

Treasury bench members tried to defend the government, saying it had ordered probes by the Crime Branch of police as well as by a judicial commission. Terming these inquiries as sufficient, they rejected the opposition demand for a CBI inquiry.

Admitting that some chit fund companies had duped investors, finance minister Prasanna Acharya said the government had initiated measures to attach properties of such companies and recover depositors' money. He said the President recently gave his assent to the Odisha Protection of Interests of Depositors (in financial establishment) Bill, which the assembly passed in 2011. "The Act has provisions for imprisonment up to 10 years," he said, assuring action against all those found guilty. The government has set up a corpus fund of Rs 300 crore to bail out the depositors, he said, adding, the judicial commission headed by Justice R K Patra would recommend how the victims be compensated.

Referring to a November 5, 2002, letter by the registrar, cooperative societies, highlighting the need to regulate such societies, Harichandan said the state government ignored it and did not even amend the relevant law at that time, leading to mushrooming of fraud bodies that cheated lakhs of depositors. The government also did not pay heed to the Reserve Bank of India's advice in 2004 to keep a close watch on chit fund companies.

Nilagiri MLA Pratap Sarangi alleged that a senior functionary of the state's legal setup had purchased a building from a ponzi firm and accused the government of having a direct role in perpetrating the wrongdoings.

"The state government is not escaping its responsibilities. But we are not the sole authority to regulate such companies. The central agencies under which certain cooperative bodies were registered should also shoulder the responsibility," Acharya maintained.

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