The Supreme Court on 5th February directed Kolkata Police Commissioner Rajeev Kumar to make himself available before the CBI and “faithfully” cooperate with the agency in investigation of cases arising out of the Saradha and Rose Valley chit fund scams probe. The apex court said Kumar will appear before the Central Bureau of Investigation (CBI) for investigation at Shillong in Meghalaya. The apex court, however, added that no coercive steps, including arrest, will take place during the course of investigation. A bench headed by Chief Justice of India (CJI) RanjanGogoi also issued a notice to Kumar and sought his response before February 20, the next date of hearing on the allegations by the CBI that he was tampering with electronic evidence and that the SIT headed by him provided the agency with doctored materials. The apex court also directed the West Bengal chief secretary and the director general of police to file replies on the contempt pleas filed against them by the CBI on or before February 18.
What is the sharadachit fund case?
- In the early 2000s, businessman Sudipto Sen set up the Saradha Group, and launched what the securities market regulator Securities and Exchange Board of India (SEBI) later categorised as a collective investment scheme.
- The Saradha Group used a consortium of companies to tap small investors, promising them very high returns.
- Like in a classic Ponzi scheme, money was collected through a wide network of agents, who were paid commissions of over 25%.
- In a few years, Saradha’s raised about Rs 2,500 crore.
- It built its brand through filmstar endorsements, investments in popular football clubs, ownership of multiple media outlets, and sponsorship of cultural events such as Durga Pujas.
- The scheme expanded to Odisha, Assam, and Tripura, and the number of investors reached close to 17 lakh.
- By 2012-13, there were protests by investors on defaulting of interest payments
- Investigations found the company had laundered investments in locations such as Dubai, South Africa and Singapore.
- Mamata Banerjee’s government set up a Special Investigation Team (SIT) under Kolkata Police Commissioner Rajeev Kumar to probe the case after clubbing all the FIRs.
- Around the same time, the CBI began investigations in Assam after the state government handed over the probe to it.
- Based on state police FIRs, the Enforcement Directorate registered cases of alleged money laundering, and arrested several people.
- In May 2014, the Supreme Court transferred all cases to the CBI, given the inter-state nature of the alleged scam.
- The SIT, which had by now conducted a year-long probe, had to hand over to the CBI all case papers, evidence, and the accused it had arrested.
- In the years that followed, many leaders were arrested.
- CBI has claimed that it has been trying to question the members of the SIT, including Kumar, for one and a half years to get information on some missing evidence, but Kumar and his colleagues have been avoiding the agency.
- CBI sources claim communication, notices, and summons to members of the SIT and the West Bengal Police asking for cooperation in the investigation have been sent on 18 occasions since September 2017, but no one has turned up for questioning.
Argument against the CBI
- The CBI should have followed the protocol before proceeding to investigate the police offer.
- The CBI did not inform the local police about its arrival in the State for interrogation.
- The timing of the CBI investigation in the state was not appropriate when state has withdrawn prior consent for CBI
- The case has been dragging for more than 5 years. The CBI chose to investigate the police officer suddenly
Arguments for the CBI
- Similar investigations have been carried out in Tamil Nadu in the Ghutka scam case where Tamil Nadu police officers were investigated by the CBI. But, such kind of protection was not provided by the State government to the police officers.
- This is a scam by some private individuals having nexus with people in power.
- The central and the state government are responsible for the investments of lakhs of people
- The CBI is the highest investigating agency of the country. Even after giving prior notice, the Police officer failed to respond.
- The issue should not be hyped as a Centre-State issue or one for banking on vote politics.
- The case should be allowed to investigate following proper protocols between the central and the state police forces.
- Investigating officers, whether it be current or earlier officer should cooperate with each other in solving the case.
- Larger concern should be of the people who have lost lots of money in the scam.