Enforcement Directorate has taken possession of movable and immovable properties worth ₹304 crore of Rose Valley Group of companies under prevention of money laundering rules.

The central probe agency had registered an FIR against the firm, its Chairman Gautam Kundu and others in 2014.

The Rose Valley scam is an old-fashioned Ponzi scheme — promise the moon, collect and rotate money in loop until the fun finally stops. Entities affiliated to the group — Rose Valley Real Estates and Constructions and Rose Valley Hotels and Entertainment — garnered thousands of crores from investors, primarily in the eastern States. These sums were ostensibly instalments for property purchases or holiday packages. But investors also had the option of getting their money back with a tidy interest — up to 21 per cent annualised. On being confronted by market regulator SEBI that started getting complaints from various authorities, the Rose Valley entities resorted to the Indian rope trick — delay and obfuscate by appealing against the SEBI notice.

Eventually, in July 2013 and June 2014, the SEBI established that the schemes were ‘collective investment schemes (CIS)’, which had failed to register with the regulator. The schemes were ordered to be wound up and the money refunded to investors. As can be expected in such schemes, there was not much money to go around at this stage, and thousands of investors were left in the lurch. Meanwhile, Rose Valley also came under the scanner of the Enforcement Directorate (ED) and CBI after the Supreme Court’s instruction to probe shady companies raising funds from small depositors — a fallout of the Saradha scam. It’s a big one, this — the sleuths put the Rose Valley scam at around ₹17,000 crore; the small depositors association pegs it much higher at around ₹40,000 crore.

Related Topics
comment COMMENT NOW