KOLKATA: Thousands of crores of rupees were raised for over a decade from lakhs of investors, but then defaults began on payments to investors who were promised huge returns and political fallouts appeared inevitable.
The ongoing stand-off between the CBI and the West Bengal government has its roots in two alleged ponzi scams associated with the Saradha Group and the Rose Valley Group, which got busted in 2013.
The fund-raising schemes, allegedly without necessary regulatory approvals and popularly known as 'chit funds' in this region, had been operating in West Bengal and its neighbouring states since 2000 and had mopped up thousands of crores of rupees from lakhs of investors.
Both the groups had invested heavily in sectors like tours and travels, realty, housing, resorts and hotels, entertainment and media.
Saradha Group, a consortium of over 239 private companies, is said to have mopped up Rs 4000 crore from over 1.7 million depositors before it collapsed in April 2013.
Rose Valley, on the other hand, is said to have mopped up around Rs 15000 crore.
Those associated with the two groups -- Sudipto Sen of Saradha and Gautam Kundu of Rose Valley -- were allegedly close to West Bengal's Left Front leaders earlier, but political pundits say they allegedly switched sides once Trinamool started gaining ground in the state.
However, fortunes of both the groups started faltering towards the end of 2012, after complaints began pouring in about their alleged payment defaults.
Saradha collapsed by April 2013 and Sudipto Sen along with his trusted aide Debjani Mukherjee fled from West Bengal.
This led to thousands of Saradha collection agents assemble before the TMC headquarters and demand action against Sen.
The first cases against Saradha were lodged at Bidhanagar police Commissionerate which was then headed by Rajeev Kumar.
Kumar, a 1989 batch IPS officer, along with his team had then arrested Sen along with Debjani from Kashmir on April 18, 2013 and the state government formed a special investigation team (SIT) under him.
The SIT had arrested the then TMC Rajya Sabha MP and journalist Kunal Ghosh for his alleged involvement in the Saradha chit fund scam.
A CBI probe into the chit fund scam was ordered by the Supreme Court in May 2014 after senior Congress leader Abdul Mannan filed a plea.
Several top TMC leaders and MPs like Srinjoy Bose, TMC leader Rajat Majumdar and the then transport minister Madan Mitra were arrested by the CBI.
Senior BJP leader Mukul Roy, who was then TMC general secretary, was also questioned by the CBI in connection with the scam in 2015.
In mid-2015, Kundu of Rose Valley Group was arrested by the Enforcement Directorate (ED) and in December 2016 and January 2017, TMC MPs Tapas Pal and Sudip Bandopadhyay were arrested for their alleged involvement in the Rose Valley case.
In the last few months, the CBI has seized what is being seen as paintings of West Bengal Chief Minister Mamata Banerjee that were allegedly bought at huge costs by the so-called chit fund owners.
In January 2019, the CBI also arrested film producer Srikant Mohta for his alleged involvement in the Rose valley chit fund scam.
On February 2, the CBI claimed that Kumar had been "absconding" and was "being looked for" in the Saradha and Rose Valley ponzi scam cases.
On February 3, a team of 40-odd agency officers arrived at Kumar's official residence to question him but they were stopped by sentries and the Kolkata Police officials and these developments eventually led to Chief Minister Banerjee sitting on a dharna for what she has called her 'Save Constitution' protest.