Saradha scam: SFIO to submit final probe report in June

The Serious Fraud Investigation Office (SFIO) is expected to submit its final report in June on the chit funds scam perpetrated by West Bengal-based Saradha and other firms.
The investigation was ordered by the Corporate Affairs Ministry in April last year following huge public outcry over the scam that duped hundreds of gullible investors by running fraudulent money-pooling schemes in the garb of chit funds.
Sources said the probe agency is now expected to submit its final report to the Ministry in June.
At the time of ordering the probe, SFIO was expected to submit its final report in December 2013. The agency had given its interim report to the Ministry in September last year.

The probe agency has gathered most of the information in the case, inlcuding gleaning of details from computer servers, and would require some more time to finalise the report, sources said.
According to sources, SFIO is also co-ordinating with capital market regulator Securities and Exchange Board of India (Sebi) with regard to the case. The latter is also looking into various entities that have raised money from the public by way of illicit investment schemes, they added.

More than 60 companies, most of them from the eastern states of the country, that are believed to have cheated the public of their money are being probed by SFIO.

The matter, mainly involving Saradha group companies, came to light early last year after investors began complaining that they have been defrauded of their money.
SFIO, in its interim report, had said that companies under the scanner indulged in serious financial mismanagement besides siphoning off the funds by their promoters, who exploited regulatory gaps.
"There has been proliferation of innovative financial products in the market due to technological advancement and extensive use of the internet to market such products to investors," it had said.
Generally state governments are the appropriate authorities for regulations of such 'chit fund' companies under the Chit Funds Act 1982.

In the wake of Saradha scam, various government agencies as well as regulators have been boosting their efforts to clamp down on fraudulent money pooling schemes.
An Inter-Ministerial Group has also been set up to ensure better regulatory co-ordination in dealing with the menace.