The recent arrests of Trinamool Congress MPs Tapas Paul and Sudip Bandopadhyay by the Central Bureau of Investigation in connection with the Rose Valley scam has failed to reassure investors in the Ponzi schemes run by the group that they will get their money back.
“It is all political power play now,” said Deba Prasad Mondal, a 60-year-old homeopathy practitioner and an investor-turned-agent with Rose Valley for more than a decade. “Centre versus the state. CBI versus the Trinamool Congress. CPM versus TMC. Where do we, small investors stand in this?”
Mondal, a resident of Sonarpur in the southern outskirts of Kolkata, is one of millions of small investors, mostly from eastern India, who have lost their life’s savings in the scam. According to the Central Bureau of Investigation’s charge sheet submitted to a special court in Bhubaneswar, Odisha, on January 7, the size of deposits with the Rose Valley companies amounted to about Rs 17,000 crores.
Ponzi schemes pay off old investors from investments made by new ones, rather than from profits.
Small investors like Mondal who sank about Rs 2 lakhs into the company’s many schemes have little hope of recovering their investment. “We have become mere pawns in the unfolding drama,” he said. “We are waiting to see who derives the political faida [benefit] from our misery.”
The scam
The Rose Valley group of companies, which had over 25 sister entities, collected money from small investors, promising them highly inflated returns. It ran several collective investment schemes across sectors – such as a holiday membership plan, a real estate scheme, and a fixed deposit scheme.
This brought it to the attention of market regulator Securities and Exchange Board of India, which, in June 2014, ordered the company to wind up and repay its investors.
The following year, Rose Valley’s flamboyant promoter Gautam Kundu was arrested by the Enforcement Directorate. That year the company also closed for business on the directions of the Calcutta High Court, and its bank accounts were sealed by investigators.
Last month, the Central Bureau of Investigation arrested Trinamool Congress MP Tapas Paul, followed by Sudip Bandopadhyay a few days later.
Since the company is under the scanner of central investigative agencies, anyone who has been associated with it in any capacity – as investors, agents or promoters – are reluctant to speak out.
“It is evident that the high and mighty are falling in the net of investigative agencies now,” said Mondal, hesitantly. “We saw a similar flurry of activity during the Saradha days, before it fell silent.”
He added: “But we are not sure where it is leading to. Will it benefit us? Will it bring back our investments? As we see it, it is essentially a political fight now and no one knows who will reap the harvest finally.”
Even in these times of distress, Mondal recalled how Rose Valley brought fortune to investors-turned-agents like him, when their incomes surged within a short span of time.
Mondal said people like him initially roped in neighbours with daily or monthly collections of subscriptions of very small amounts under various Rose Valley schemes. The business soon became a craze after early small investors got their returns within a year or two, emboldening them to opt for bigger investments like fixed deposits, said Mondal.
A neighbourhood’s misfortune
Kishore Keat Anthony, an Anglo-Indian living on Christopher Road in eastern Kolkata regrets the misfortune that has struck him and his neighbourhood, which teems with Rose Valley investors.
After attending church on Sunday morning, Kishore sat in his one-room house and took out a bunch of certificates – all Rose Valley investments – totalling close to Rs 10 lakh.
“These are my blood and sweat,” Anthony said, clutching the pieces of paper. “But we are faced with an uncertain future as there is no guarantee of a return of our investments now.”
Last month, Anthony organised a signature campaign by Rose Valley agents and investors. They wrote to West Bengal Chief Minister Mamata Banerjee urging her to intervene to save their lives.
The letter said:
“In our struggle for existence so far nearly 300 investment collectors and investors-agents have committed suicide. Our back is to the wall. We are socially isolated and we are facing slow death. Our respect is trampled. What other option is left to us but to choose the path of suicide…We urge you to find a solution to the deadlock.”
In the neighbourhood, the husband-wife duo of Sukhlal and Jayanti Naskar are one of the many people whom Anthony had persuaded to invest in Rose Valley schemes.
The Naskars put their money into the Rose Valley Real Estate and Land Bank India Ltd, a scheme that promised to give them a parcel of land against a fixed deposit of Rs 35,000 after 20 years.
“This was our hard earned money,” said Sukhlal Naskar. “But we do not know if we will ever get it back. We are happy that big and influential people who had benefited out of the poor’s men’s money are now being put behind bars. Let them return our money now.”
Similarly, Pulak and Basanti Naskar had invested in a Rose Valley scheme in December 2014. They were told that their monthly flexible deposits of Rs 6,000 would fetch them Rs 76,800 after a year. Based on this promised return, Pulak Naskar, a driver, booked a vehicle that he intended to run as a private taxi. The family is now devastated.
Both Naskar couples initially put pressure on Anthony, who had introduced them to Rose Valley, to return their money. But they say that they have come to realise that the problem lies elsewhere.
“Too many influential people had sucked money from this company and looted our investments,” said Pulak Naskar. “The present arrests will have a meaning only when we get back our investments.”
Political colour
However, the return of investors’ money doesn’t seem a priority now. At present, the investigating agencies are zeroing in on all the influential people who promoted Rose Valley, and helped it build an aura of credibility.
Like Mondal, several investors feel that the Rose Valley case investigation is being used as a political tool, like the Saradha chit fund investigation.
A Communist Party of India (Marxist) rally in central Kolkata on Monday focused on the recent Rose Valley arrests. Its participants marched holding placards saying: “CBI should catch the big fish, not the small ones”, and “Narada, Saradha, Rose Valley, Sahara and Birla – down with Trinamool Congress, down with the BJP. Modi hatao, desh bachao; Mamata hatao, state bachao.”
At the rally, Manab Mukherjee, Sujon Chakrabarty and other Left leaders said that they wanted the “script of the conservations held between Gautam Kundu of Rose Valley and Mamata Banerjee at Delo forest bungalow in Kalimpong in 2012 to be made public.”
The Narada scam relates to a sting operation in which several top Trinamool Congress members were caught on hidden camera, accepting bribes. It hit the headlines just before the 2016 Assembly elections in West Bengal.
Chief Minister Mamata Banerjee, however, has often hit back at her opponents in the Left saying that the companies that are now being investigated for financial fraud originated during the Left Front regime, and it was the Trinamool Congress government that took action against them.
In 2013, the West Bengal government had instituted a commission headed by Justice Shyamal Kumar Sen to investigate Ponzi schemes, including the Saradha chit fund scam.
“We had begun the process of returning money to the poorest segments and had worked out a clear policy for future payments as well [in the Saradha scam],” said Sen. “We had first taken care of those who had invested up to Rs 10,000 and in the next phase we had plans to return money to those who had invested up to Rs 20,000. But the Commission was wound up by the government following the induction of the CBI to investigate the scams. It is certainly possible to give some relief to the suffering millions and the focus of any action should be directed to that end.”
Describing the arrest of her party leaders as “revenge politics,” Banerjee has insisted that she will not be cowed down by the Central Bureau of Investigation or other central agencies.
In the court
At present, the Calcutta High Court is hearing a petition from the Amanatkari Agent Suraksha Manch which has demanded that investors’ money in Rose Valley companies, among others, should be returned as early as possible.
Subir Dey, a spokesperson for the Manch said that the High Court had mooted the setting up of a committee to look into ways this can be done, but the Enforcement Directorate intervened, saying that the cases involved “money laundering” and hence the money could not be returned without its consent.
The matter is likely to come up for hearing soon, said Bikash Bhattacharya – a senior lawyer in the Calcutta High Court who represents the Manch.