BHUBANESWAR: The Central Bureau of Investigation (CBI) on Monday cracked down on another ponzi firm Micro Finance Limited (MFL) and searched the residential premises of its former managing director Durga Prasad Mishra in the City.
During the two-hour search at Mishra’s flat at Aryabhoomi Complex in Patia, the sleuths seized documents related to the firm, which also has a television channel.
Earlier in the day, a group of investors gathered near Mishra’s residence and demanded action against him. Local police was intimated and so was the CBI following which a four-member team raided Mishra’s flat.
In fact, the Central probe agency had already started its investigation into MFL when it took one of its Directors, Ashok Patnaik, on nine-day remand in October. MFL, according to the depositors, had several branches spread across the State and it had allegedly mobilised over `100 crore from the investors. While the depositor base runs into thousands, the company had invested in housing, hospitality as well as in media.
Interestingly, the company not only conned the investors, it also tried to use the State administration to gain the trust of the depositors despite not possessing Reserve Bank of India (RBI) authorisation to run finance schemes.
Earlier in March, the Economic Offences Wing of the Crime Branch arrested Ajay Swain, a former private secretary to the Commissioner-cum-Secretary to Panchayati Raj department and MFL Director Baikuntha Nath Patnaik in this connection.
Swain had issued an endorsement letter to all District Collectors seeking favour for the company though he had no official authority to write one.
The RBI had found during a routine verification that the firm was registered as a non-deposit taking non-banking financial company (NBFC) but was collecting deposits from the public using Swain’s letter. The letter had mentioned that MFL was established as per RBI guidelines and made good business across the State though some branches of the firm were closed down after the chit fund scam surfaced. The letter had requested the Collectors to take steps to facilitate smooth running of the firms since it has good reputation.
Last year, when the chit fund scam came to the fore, as many as 13 cases were registered against MFL and 13 persons were also arrested, while its branches were closed down. Later, Patnaik was also arrested. During the day, the CBI also quizzed Ashok Choudhury, a former Deputy Director of Odisha Renewable Energy Development Agency (OREDA) with which the Seashore Group had entered into an agreement in 2011 for a 25 mega watt power plant at Titlagarh. The pact for the solar power project was cancelled in July 2012 but the Seashore Group had paid `2.5 crore as earnest money to the PSU. The EOW, while probing into the matter, had attached the earnest money.