Odisha chit fund scam: Why didn't the state government act despite proof of political patronage?

Bhubaneswar: In a report submitted to the Supreme Court, the Odisha government said that over one million investors in the state were duped of over Rs 4000 crore by 163 fraudulent chit fund companies for almost a decade.

The question that had the experts puzzled was how could this daylight robbery thrive for so long and what was the state government doing.

The ongoing CBI enquiry into the scam may soon answer these hard questions. Recently the investigative body raided the homes of BJD leaders Ramchandra Hansda and Pravat Tripathy. The raid unravelled political links to chit fund scams in the state.

CNN-IBN met one insider Chinmay Verma, a former senior staffer at Seashore Group, accused of duping 1.5 lakh investors of over Rs 1700 crore, lost Rs 25 lakh in the scam and told us how Prashant Das, owner of the Seashore Group, ran the massive fraud.

"Seashore use to induce the investors with very attractive but unrealistic schemes. There was no proper audit done of the accounts and seeing the proximity of the owners with top political leaders investors easily believed them. So huge money came easy and fast until the bubble busted."

CNN IBN also grabbed exclusive information in 2009, the Odisha crime branch had recommended action against a dozen fraudulent firms including Artha Tatwa and Seashore group. Instead such firms were made partners in several government projects with top Biju Janata Dal ministers. Even Chief Minister Naveen Patnaik was seen attending functions arranged by these firms.

Satyanaryan Jena, the Victim, said, "When government is promoting such companies and when top leaders were acting like their brand ambassadors, there was no reason for us not to believe such chit fund companies."