Chit fund scam: Odisha govt knew all about it since February 2011

Reported by Chinmaya Dehury
Bhubaneswar, Sep 28:

The Odisha government, which has been pretending it had no knowledge of the multi-thousand crore chit fund operations in the state until the scam broke out and denying any involvement of politicians and bureaucrats in it, has actually harbored the scamsters with full protection, even bypassing the direction of the Centre to take action against the ponzi firms.

Going by irrefutable evidence, it is clear that the Naveen Patnaik government’s involvment in the mega scam is neckdeep.

The Central Economic Intelligence Bureau (CEIB) of Department of Revenue functioning under the Ministry of Finance had informed the Odisha government vide letter no. 301/15/200 dated February 14, 2011 about illegal running of money circulation schemes by Seashore and had asked for action against the company.

But, the self proclaimed clean government did not take any action against the company, which duped thousands of depositors in due period.

What is even more intriguing is that the chief minister Naveen Patnaik, his political adviser  Pyarimohan Mohapatra , the Bhubaneswar MP Prasanna Patasani ignored the warming and attended the launching ceremony of the Seashore-floated STV news channel on March 18, 2011, more than a month after the Centre had informed the state administration about Seashore’s financial fraud. Bollyood star Katrina Kaif was also seen in their company.

Nothing changed even after the CEIB had sent a similar letter again on 22 March 2011.

Instead of taking any action against the fraudulent company, the government was busy signing MoUs with it for various projects.

The intelligence inputs of Ministry of Finance had clearly mentioned that Seashore had been luring the gullible people through various schemes. But, the Naveen Patnaik government sat over these vital inputs and allowed the companies to loot the people.

“The assessee group collects deposits from the public through its main company Seashore Securities Ltd. During the search it was detected that the depositors have been lured by this company by offering very high interest rates etc. But the interests paid have been shown in the accounts as dividend and has been paid out of the deposits only. As, such the company has no commensurate business income to make such huge interest payments,” said Praveen M Khanjooja, ADG of the economic Intelligence department in a confidential letter to the then chief secretary on March 22, 2011.

He further informed the company was running a money circulation scheme and the amount paid out as dividends was to the tune of Rs 99.85 crore and was wrongly shown as expenditure in the accounts.

But, the Odisha government did nothing to probe the matter or put a brake on the illegal money circulation.

While Seashore is perceived to have duped to the tune of Rs 1500 crore, it had entered in MoUs with the government to set up an power plant in the state. It was also allowed to set up a maize processing plant at Nabarangpur.

It is worthwhile to mention here that the Seashore company had opened 42 branches across the state and had invested in a number of projects including the Seashore group of hospitals, travel agencies, products, retail outlets, media business, credit cooperatives and multi-purpose projects.

Was such massive expansion of illegal business possible without the active connivance and support of the political bosses and government machinery? That is something the CBI is now trying to unravel, sources said.