CBI raids 33 firms across 5 States in chit fund scam

The Central Bureau of Investigation on Wednesday carried out searches against 33 private firms and group of companies across five States in connection with two cases of alleged chit fund scams involving hundreds of crores.

The searches were conducted at 82 locations in West Bengal, Bihar, Jharkhand, Odisha and Andhra Pradesh. “In connection with the ongoing investigation in two cases of chit fund scams, the CBI conducted searches on the residential and official premises of the suspects, including a former MLA of Visakhapatnam (W) in Andhra Pradesh, Malla Vijaya Prasad,” said a CBI official.

During the searches, the CBI seized Rs. 44.90 lakh in cash from the residence of the former MLA, who was the managing director of private firm Welfare Building and Estate Limited, and Rs. 16.80 lakh from the residence of the then director of the company, Varaha Ramakrishna Batya.

The agency had earlier registered the cases against the companies and its directors on the directions of the Jharkhand High Court.

It was alleged that the companies and their directors illegally received huge public deposits on false promises of phenomenal returns, by issuing shares or debentures, conducting private placements, purchasing land and other such pretexts.

Most of these companies were located in Jharkhand’s Ranchi, Koderma, Ramgarh, Dhanbad and Deoghar, West Bengal’s capital Kolkata, Howrah and 24 Parganas.

The CBI suspects that the funds were diverted to the individual accounts of suspects.

It has gathered records pertaining to the financial transactions of the companies that are under investigation.