Saradha scam: Where has all the money gone?

It was a multi-million rupee scam whose extent and reach are still being unravelled, so why did the chief of the scam-tainted Saradha group Sudipta Sen plead that he was unable to pay Rs 30,000 as bail fee? Where could all the money have gone? Indrani Roy/Rediff.com finds out.

A report published in a widely circulated Bengali daily recently stated that scam-tainted Saradha group’s chief Sudipta Sen has pleaded to the court to reduce his bail fee from Rs 30,000 to Rs 20,000 on the ground that his family won’t be able to pay the former amount.

Such a declaration is ironical, coming from the alleged kingpin of a multi-million scam that rendered thousands of (mostly rutal) people penniless.

While investigating the Saradha scam, the most difficult task for the Central Bureau of Investigation sleuths has been tracking the money trail.

During an interview to rediff.com in 2013, jailed Trinamool Congress member of Parliament Kunal Ghosh had directly accused some ‘close Trinamool associates’ of ‘utilising the funds’ that they regularly received from Saradha boss as ‘gifts’.

However, till date, the investigating agency has not come out with any statement on this.

It is an open secret now that Sen squandered a huge part of the money that he received from his beneficiaries.

He threw lavish parties, spoilt his associates with expensive gifts and poured fat pay packets and fatter perks on many of his ‘favourite’ employees.

But that alone could not eaten up the corpus of Rs 2,460 crore (Rs 24.6 billion) that the entire scam was worth.

So where has all the scam money gone?

How much does the jailed minister Madan Mitra know?

Bengal Minister of State for Sports and Transport Madan Mitra’s name cropped up innumerable times in the Saradha saga.

Political observers, analysts and even some Trinamool insiders have been unanimous in their allegation that Mitra, who is now in CBI custody, used the Saradha group CEO (Sudipta) Sen as a  human automated teller machine that would spew money at his beck and call.

Media reports also suggested that Sen had helped the minister’s 2011 assembly election run-up by providing him vehicles, fuel and drivers.

In a supplementary chargesheet against the transport minister in the Saradha Realty case, the CBI corroborated this.

According to CBI sources, the chargesheet also mentioned that the Saradha chief ‘often’ gave "packets of cash to Mitra".

The CBI had pointed out that the minister visited Sen at his Midland Park office mostly past midnight and held closed-door meetings.

Mitra's former confidant Bapi Karim, reportedly admitted to the CBI to meeting Sen in his Midland Park office a few times.

Karim is known to have divulged that during one such visit, he had collected money at the behest of Mitra from the Saradha chief for the repair of Laxmi Narayan Temple in Bhasha in Bishnupur, South 24-Parganas.

Mitra had won the 2009 bye-elections from Bishnupur West.

Mitra attended many functions organised by the Saradha group wherein he showered praises on Sen for his business ‘acumen’, the CBI said.

In one such meeting, Mitra is quoted to have lauded the Saradha chief for bringing ‘glory to Bengal by expanding his business all over India.’

In the supplementary chargesheet against Mitra, the CBI had said that the minister was the president of the Saradha Progressive Employees Union.

“As a member of the legislative assembly, Mitra’s monthly salary was about Rs 30,000. But during his son’s wedding, he invited 10,000 guests and cost of each food plate was Rs 2,000. Where did he get all that money from?” a former TMC member of Parliament told rediff.com during an informal chat.

Mitra allegedly amassed huge wealth over the past few years and the investigators are now busy making a list of his assets.

The minister, however, had denied all these charges and said if it could be proved that he had taken a ‘single penny’ from Saradha, he would resign.

Why was a north Kolkata petrol pump owner on Saradha beneficiaries’ list?

The CBI's interrogation of Amrin Ara, one of the oldest and most ‘loyal’ executives of Saradha chief, revealed that (Sudipta) Sen used to send money to a petrol pump owner of north Kolkata every night, sources told rediff.com.

Daily collections to the tune of Rs 50,000 to Rs 100,000 by Saradha agents were sent to the company head office at Salt Lake's Midland Park.

There, one part was kept to meet daily expenses whereas the other part was sent to the petrol pump owner, CBI sources told rediff.com.

Details of collection and distribution of cash were kept in two diaries -- a blue one and a beige one, sources added.

The CBI officials are now trying to figure out if Sen was into hawala business as well and used to divert money through that channel with the petrol pump owner as his agent.

“The nature of business that Saradha was involved in suggests that it was a part of the hawala racket,” veteran Congress leader Abdul Mannan told rediff.com over telephone.

Mannan was one of the first political figures to have sent out alarms about the dubious nature of Saradha’s business

“Though the investigators are yet to come out with a definite statement on this, even a child can infer that (Sudipta) Sen’s company was into hawala deals,” Mannan said.

“To ascertain Saradha’s hawala link, both (Amrin) Ara and that petrol pump owner could prove to be vital links for the investigators,” CBI sources told rediff.com.

Did Saradha money travel to Singapore and UAE?

During the interrogation of various Trinamool Congress leaders, ministers and associates, including the former directorate general of police Rajat Majumdar, Singapore figured many times in the probable list of destinations that the Saradha money could have travelled to.  

Moreover, documents recovered from various Saradha units across Kolkata hinted at Saradha’s Singapore link.

According to sources, the CBI has drawn up a list of a few non-profit organisations that could have been involved in diverting Saradha money.

The investigators are looking into the accounts of a hotel where a top Trinamool Congress leader allegedly invested money.

During his marathon interrogations, (Sudipta) Sen had also mentioned Jebel Ali.

This brought United Arab Emirates under the CBI lens as well.

The investigators are not ruling out Saradha’s connection with the Jebel Ali Free Zone of Dubai that offers advantages like zero taxation on profits.

CBI sources have told the media in recent past that they had traced several bank accounts registered in the name of Sen and his kin to foreign countries.

“Sen, his kin and associates had over 270 bank accounts. We are examining the transaction details of these accounts,” a CBI source told rediff.com.

The CBI suspects that Sen could have parked funds in several real estate projects abroad.

What is painter Suvaprasanna’s link to the scam?

The Saradha scam probe knocked at the doors of Bengal’s acclaimed painter Suvaprasanna as well.

The painter, once known as a ‘friend, philosopher and guide’ of West Bengal Chief Minister Mamata Banerjee, was summoned by both the Enforcement Directorate and CBI on various occasions.

Reason? Suvaprasanna allegedly sold to (Sudipta) Sen a television channel, Akhan Samay, that he had once conceived as the Trinamool Congress mouthpiece, at a price much higher than the market price.

The channel got a licence from the ministry of information and broadcasting in April 2010.

As the project failed to take off because of some administrative and technical glitches, the painter decided to sell it andm according to his own statements, he settled the deal with (Sudipta) Sen for Rs 6 crore (Rs 60 million).

The channel’s selling price allegedly was much higher than the prevailing market price.

The channel was transferred to Saradha in July 2012.

ED officials wanted to know from the painter if he had the power of attorney of the other 12 shareholders who had invested in the television channel, to sell the company's shares to Saradha on January 2, 2012.

They also wanted the artist to show the papers of the flat he bought in Mumbai with loans taken from Devkripa Vyapar, the holding company of Akhan Samay.

It is heard that none of the agencies was satisfied with the replies that Suvaprasanna furnished.

The ED is heard to have already attached the painter's Mumbai flat.

Suvaprasanna claimed that he met the Saradha boss first when he visited his residence some time in 2011 to talk about the deal.

The CBI and ED are now trying to find out the reasons that might have compelled Sen to buy the said channel at such a steep price.

The mysterious film festival party

Investigations revealed that the Saradha chief had thrown a party in a leading hotel in Kolkata in 2012 to mark the closing ceremony of the Kolkata International Film Festival that year.

The responsibility for organising the party was given to (Sudipta) Sen’s associate Somnath Datta. The latter was the election agent of actor-turned Trinamool MP, Satabdi Roy.

Though the probe exposed that about Rs 30 lakh (Rs 3 million) was spent at that event, only Rs 200,000 got transferred to the hotel accounts from Saradha’s, sources told rediff.com.

Was the rest of the amount paid in cash? If so, who paid it and to whom? These are a couple of intriguing questions that the CBI and ED are seeking answers to.

Since Datta was (Satabdi) Roy’s election agent, her name too got dragged into the scam. Incidentally, Roy was on Saradha’s pay roll as the company’s brand ambassador.

“The actress-turned-MP, who attended several Saradha events as the company’s brand ambassador, is very much within the ambit of our investigation,” an ED source told rediff.com.

Massive irregularities in the accounting practices

Investigators probing the Saradha scam allegedly found a lot of ‘holes’ in the accounting practices of the group.

Strangely, most of the group companies had a common auditor -- which was in violation of the company law.

'There were significant irregularities in the accounting practices of the Saradha group firm under our scanner that sought to mask facts. All of them were shown to be debt-free firms; the outstanding loans in their financial statements were partly of investors, other group company loans and advances,' CBI sources were recently quoted by the media.

The probe indicated that the Saradha group allegedly misrepresented its business to the income-tax department, depositors and the Securities and Exchange Board of India.

The Serious Fraud Investigation Office had alleged that S K Gupta Roy, auditor of various Saradha group firms, was involved in false certification.

Gupta Roy was the auditor of over 50 Saradha firms -- Saradha Realty, Saradha Construction Company, Saradha Tours and Travels, Bengal Media etc -- through which (Sudipta) Sen had raised money.

Sen diligently transferred money from one company to another between 2007 and 2012.

The balance sheets of all these firms were last submitted to the Registrar of Companies in March 2012.

When rediff.com approached the audit firm located at Rajpur in the southern fringe of Kolkata, its officials refused to speak on the Saradha issue saying that "any irresponsible statement might hamper the investigation".

However, a report published by Times of India last year quoted the auditor as saying that he would get only 15 days to prepare the balance sheet and submit to the Registrar of Companies.

Asked by the newspaper how he could audit the accounts of 50 companies in 15 days, Gupta Roy was quoted as saying that he got assistance from two Saradha officials. This, too, according to the SFIO, violated the basic norms of an independent audit.

Image: This file photograph shows Saradha agents staging a dharna in Kolkata. Photograph: Dipak Chakraborty/rediff.com.