Amit Shah's statement raises serious questions about Saradha scam

The allegationsof Bhartiya Janata Party (BJP) President Amit Shah and the government’s stance on Wednesday over alleged terror linkages of the scam-hit Saradha group and the subsequent explanation by the party leadership have raised serious questions about the scam.

This is how it unfolded: On Sunday, addressing a rally in Kolkata, BJP President Amit Shah openly alleged that the money raised from thousands of depositors was used to fund the 2 October Burdwan blasts allegedly perpetrated by terrorist outfit Jamaat-ul-Mujahideen Bangladesh (JMB).

The National Investigating Agency (NIA) is not being allowed to probe the blast properly and hurdles are being created to save Trinamool Congress leaders who are involved in the blast, Shah said.

More from Economy

Inflation likely to be a big focus area for budget 2024, say sources Explained: Will the Bank of Japan break tradition and raise interest rates?

But, Minister of State for Personnel Jitendra Singh told the Lok Sabha in a written response that the investigations into the case so far has not revealed that Saradha was routed to Bangladesh to fund terrorist activities, putting the BJP top brass in a spot on the issue.

The BJP also saidthe investigations are still on and there isn’t any clean chit to Saradha in the case. In short, there are no reasons to believe that Saradha does not have terror linkages.

Clearly, something is amiss in this whole episode.

The BJP president’s statement came on Sunday but the clarification from the government about the “investigation so far” came on Wednesday.

Did the BJP president speak in a public rally on a controversial subject such as Saradha’s terror linkage without a reality check? On the other hand, if Shah’s allegations are indeed true and based on evidences he is privy to, why did the government state otherwise in Parliament?

It is important to note Shah isn’t the first person who has linked the Saradha scam to suspected cross-border terrorist activities.

According to a 24 August Indian Express report investigative agencies-Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) had stumbled upon evidences that proved Saradha chief, Sudipto Sen, had transferred substantial amount of money to finance Islamic terrorism in Bangladesh and to fund anti-India radical Islamic groups.

This was done through Trinamool MP, Ahmed Hasan Imran, who, in the past, had links with Students’ Islamic Movement of India (Simi), which is banned in India, and other such organizations. Simi was banned in India in 2001.

In fact, the report has quoted one former Special Director, Intelligence Bureau, Dhanesh Chandra Nath on Hassan.

“We all know who this man is. It is unfortunate that West Bengal CM Mamata Banerjee sent Ahmed Hassan alias Imran to the Rajya Sabha despite knowing his antecedents. When SIMI was banned in 2001, Mamata Banerjee was a Union minister and she should have known about its leader’s activities in West Bengal,” Nath was quoted as saying in the report.

The issue yet again took a fresh turn when sleuths arrested ex-Trinamool Congress MP, Kunal Ghosh, in November, who in turn, accused Mamata Banerjee of being the biggest beneficiary of the scam.

Shah’s allegations, who presides the party that runs the government at the centre, deserves much more attention by investigators.

More Saradhas in making?

The Saradha case, clearly, no longer confines to the notions of a typical Ponzi scheme, where the money manager runs off one fine morning, leaving hundreds of depositors dumb stuck before the closed cash counter.

The whole scam has much more linkages with politics than economics. More skeletons are waiting to tumble out of the closet in the days ahead.

The bigger concern is Saradha isn’t the only company that has defrauded investors.

Besides the firms running Ponzi schemes, there are thousands of private chit funds too operating in the country illegally, putting the hard-earned money of poor depositors at high risk.

India’s illegal chit fund market is worth trillions of rupees and poses major threats to the common investors and the financial system.

Even for the regulated chit funds, the current regulations are sufficient since they still come under the archaic 1982 chitfund Act, which is defunct in many states. That’s because state governments either lack the expertise or the political will to deal with illegal finance schemes.

As Firstbiz noted earlier , if the investigations indeed confirm the allegations related to Saradha’s terror links, that would mean deposits raised from the unsuspecting public were in turn used to destabilise the nation and its citizens.

In the light of the developments unfolding at Saradha and given the involvement of influential politicians in the matter, there is need for a serious re-look at the current pace at which regulators approach illegal financiers and deposit takers, whether big or small.

To be sure, in August, the government gave more teeth to market regulator, Securities and exchange board of India to act against illegal money-pooling schemes involving Rs 100 crore or more. This, however, doesn’t take care of the whole set of problems involving smaller units, which are large in number.

There is a desperate need for comprehensive chit fund regulations and monitoring process needed to avert more Saradhas in future- something, which both the UPA and the NDA governments have conveniently ignored so far.