Rs 4,000 cr at stake, SEBI asks Bengal to probe five more chit fund companies

FPDebjani Mukherjee outside Ganderbal court, Wednesday. PTI

As the investigation into the Saradha chit fund scam threatens to reach the doorstep of the Trinamool Congress, the markets watchdog is learnt to have warned of a larger, more frightening scenario: similar Ponzi schemes run by at least five other companies in West Bengal, involving over Rs 4,000 crore of small investors' money.

In its latest communication sent to the state government, the Securities and Exchange Board of India (SEBI) is learnt to have recommended an immediate probe and steps against these five firms.

"The companies are in danger, so are the investors," SEBI is learnt to have said.

"It is a pressure cooker bomb situation in Bengal now with scores of dubious financial institutions mushrooming and duping millions of investors with the lure of quick financial returns. One (Saradha) has gone bust, several other disasters are waiting to happen," a top SEBI official told The Indian Express.

Chief Minister Mamata Banerjee has acknowledged the receipt of one letter from SEBI regarding the Saradha Group, but has so far been silent over the other companies which, it is feared, may have raised even bigger sums from depositors.

On SEBI's list of suspect companies is the Rose Valley Group, which has interests in realty, hotels and resorts, travel, media and insurance. A team of SEBI officials were learnt to have visited the company's offices to inspect their books last week, but were allegedly denied entry.

The officials later complained officially that "government servants were obstructed to perform their duty", sources at the Bidhannagar police commissionerate said.

Earlier, a team from the audit firm KPMG, who were commissioned by SEBI to conduct a "forensic audit" of Rose Valley's accounts, too had allegedly been denied entry into the company's premises. Panicky investors have been thronging the company's offices across Bengal seeking refunds, leading to some violence over the past two days.

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