A SFIO probe into Saradha scam and 'chit fund' operations of 62 other entities has found serious financial mismanagement and siphoning off the funds by their promoters, who took advantage of regulatory gaps.
The financial fraud investigative agency is also trying to get details stored by these entities on computer servers located abroad, the Corporate Affairs Ministry said on Monday while releasing excerpts of the interim report on SFIO probe.
While the final report would be submitted by the Serious Fraud Investigation Office (SFIO) by December, the interim report has said that "useful information has been collected from the servers of the companies housed in India by using forensic technology.
"However, enforcement agencies are making all efforts to access information stored in servers located outside India," it said. The promoters of these companies have tried to take advantage of multiple legislations with overlapping jurisdictions, it added.
"There has been proliferation of innovative financial products in the market due to technological advancement and extensive use of the internet to market such products to investors," the report said.
It also pointed out that there has been evidence of financial mismanagement, diversion and siphoning off funds by the promoters.
Due to non-cooperation by the promoters of one of the group companies, SFIO had to resort to search and seizure operations, after obtaining appropriate court orders, it added.
SFIO, which comes under the Ministry of Corporate Affairs, was asked to conduct investigations against 63 'Chit Fund' companies operating in the eastern states and belonging to five business groups including Saradha.
While state governments are the appropriate authorities for regulations of such 'Chit Fund' companies under the Chit Funds Act 1982, the MCA had ordered a probe in April after a huge public outcry over Saradha scam in West Bengal.
A Special Task Force (STF) was set up in the SFIO to look into the functioning of the so called 'Chit Fund companies' in the country as a whole at that time.
The ministry said that several corrective measures have already been initiated by the Government by constituting an inter-ministerial Group to work out the modalities for better inter-agency coordination.
Regulatory agencies such as market regulator Sebi and the Reserve Bank and those under the MCA have also launched media campaigns aimed at cautioning investors not to fall prey to fraudulent companies.
Meanwhile, keeping her promise to return money to the poor who had invested in the Saradha Group that went bust in April, Chief Minister Mamata Banerjee today distributed cheques to 929 such depositors.
Those who received cheques, as recommended by the Justice (Retd) Shyamal Sen Commission set up the West Bengal government, had invested up to Rs 10,000 in the ponzi schemes.
Banerjee called upon people not to make any investment henceforth in any chit fund company in view of the Saradha Group scam in which thousands had been defrauded.
Justice (Retd) Sen said that in addition to today's 929 depositors, payment would be made to 1.04 lakh depositors before Durga Puja and two lakh more before Kali Puja.
Justice (Retd) Sen said that nearly Rs 50 crore (Rs 500 million) would be spent before Kali Puja on making payment to the Saradha Group depositors. The state government earlier had set up a fund of Rs 500 crore for the purpose.
So far, the Commission has heard nearly 8,000 depositors, while 17.39 lakh depositors registered their complaints.