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West Bengal's ponzi schemes could be much bigger than anticipated. Data collated by the All-India Small Depositors' Association from agents of 27 money pooling companies show they collectively raised close to Rs 40,000 crore in the last four years in the state.
This excludes money collected by one of the biggest money-pooling companies, Rose Valley, which raised over Rs 15,000 crore, and Saradha, which raised nearly Rs 2,500 crore, according to estimates.
The depositors' association has prepared a list of 114 companies, which have 1.5 million agents among them. According to Subir De, convener of the association, the money raised by all the ponzi schemes could be over Rs 1 lakh crore.
In April 2014, the association had filed a public interest litigation in the Supreme Court, seeking investigation against 114 companies that had raised money through collective investment schemes. The court directed the petitioners to seek the intervention of suitable investigation agencies.
The association wrote to the Securities and Exchange Board of India, Enforcement Directorate, Serious Frauds Investigation Office, Reserve Bank of India, Registrar of Companies, ministry of company affairs, and the West Bengal government for launching investigations.
"After the Supreme Court order, only Sebi took some action. It initiated investigation against 32 companies. However, since we did not receive a response from any investigation agency except Sebi, we moved the Supreme Court again, and the next hearing is on April 27," said De.
In most cases the money was raised through advances for real estate and hospitality projects on the promise of hefty returns. The bosses of three companies accused of running ponzi schemes, Rose Valley, MPS and iCore, are in custody. There are close to 4.5 million agents and 80 million depositors in ponzi schemes in 19 states, according to De. West Bengal alone has 25 million depositors.
Rose Valley, which was initially left out of the list by the association, has now been added in. According to De, Rose Valley could have raised nearly Rs 38,000 crore in West Bengal, Tripura, Jharkhand, Orissa, Assam and Bihar. According to the Enforcement Directorate, the company raised Rs 15,000 crore from depositors.
