'Cheat' fund goes on unchecked - The New Indian Express

'Cheat' fund goes on unchecked

Published: 08th November 2012 12:25 PM

Last Updated: 08th November 2012 12:27 PM

The lure to make quick bucks has left thousands of poor and unsuspecting people of Odisha, Balasore in particular, penniless. Owing to the widespread prevalence of dubious multi-level marketing companies in Odisha, thousands of poor people from villagers and small towns are falling victim to chit fund schemes.

One Sanjulata Gochhayat, of Gunduripada village in Balasore district, says one such investment almost cost her her marriage. “When an agent of Trident Advertising and Trade Link Pvt. approached us to invest, I was tempted. He had promised us two times the initial deposit within a year and I had invested `8,000. But we got nothing in return,” she said. Last year, she was deserted by her husband, but he later agreed to bring her back home after villagers intervened.

Similarly, Swarnamani Jena (65), a widow of Pandarungi village, who sold off two goats and paid Rs 5,000 to an agent of Trident, got nothing in return.

For Pitambar Biswal (42), a farmer of Baigandiha village, the loss is even more bigger.

In 2008, when Trident promised three times the deposit in just seven months, he had invested Rs 23,400 with the company with the hope that the money he would receive in return would help in marrying his daughter off. He withdrew Rs 2,320 against two cheques but the rest of the cheques bounced and the family was left devastated.

The ‘loot’ by chit fund organisations came to the fore in Odisha in July 2009 when the Crime Branch unearthed a scam of Rs 200 crore involving seven multi-level marketing (MLM) companies.

A total of six cases were registered and FineIndi Sales promoters, Bollywood producer and actor Naseer Khan and one of his associates along with Trident Advertising Director Namdev Navle and CMD Rajendra V Sindhe, were arrested. The cases are sub judice and the arrested are out on bail. The CB has already frozen about Rs 191 crore.

Even real estate companies, micro-finance and self-help cooperative societies have been accused of duping people on the pretext of hefty returns.

Though none could spell out the exact figure involved in the business, sources indicate that MLMs have done a business of over Rs 500 crore in the last seven years in the district alone.

This year, the CB and the State Police have raided four more such MLMs, which include Seashore Group, Sai Pragati Assets and Properties Pvt Ltd, Ashore Group and AT Group.

The network-marketing firms are flocking to Odisha because they have managed to skirt between the legal loopholes. Though such schemes are banned under the Prize Chits and Money Circulation Scheme (Banning) Act, 1978, it has failed to completely put a check on the business.

Financial Adviser J K Das suggested that the Government should take measures to refund the depositors their hard-earned money.

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