Saradha scam isn't just Mamata versus Centre, it's much bigger than that

In all this din over how the CBI is drawing a bead and chasing down Mamata Banerjee's TMC netas, as part of a larger BJP design to emasculate her government in the run up to polls next year; we may be overlooking the cognitive process involved in reading the tea leaves.

Here is a news flash - the throwdown between the BJP and TMC may be bruising and ugly, as the culpability of other TMC leaders close to Mamata didi may well be established, but this could merely be a side story. For hidden in different reports and depositions by the lynchpin Sudipta Sen, and other probe agencies, may well be the larger story of how the Saradha scam remained bubbling under the surface for so long, operating like a stealth bomber and soaking up hundreds of crores of gullible investor money.

The answer could be immunity from the regulators along with possible political patronage. Lucre was obviously the lubricant as Sudipta Sen's Saradha permeated all walks of life in Bengal. The hapless poor who invested were merely lab rats in a gargantuan pyramid scheme. Glossing over the reality of bribes having been paid to regulators, we may be narrow focusing too much on politics and more granularly on destabilising Mamata Banerjee's government. While the exhaustive Serious Fraud Investigation Office (SFIO) investigation report of Saradha Realty India Ltd and other Sudipta Sen Group companies highlights the role of several TMC politicos, it also looks at purported payments made to regulatory agencies.

In his deposition on oath recorded under section 240 (2) of the Companies Act 1956 Sudipta Sen stated that monthly payments were made to Debabrata Sarkar alias Nitu (secretary of East Bengal Football Club) at the rate of Rs 70 lakh per month for four years for settlement of matters with RBI and SEBI. Besides this, payment of Rs 15 lakh per month was made to Ramesh Gandhi for four years for looking after corporate affairs of the group. However, Sen's closest associate in this operation, Debjani Mukherjee, - during the course of her deposition - said that approximately Rs 16-18 crore payment had been made to Debabrata Sarkar for settlement with SEBI and the RBI. Smoke and mirrors is obviously the name of the game here. Debjani also stated that around Rs 3 crore was paid to Jinesh Vanzara, chartered accountant and president of the Institute of Chartered Accountants of India (ICAI) for managing Income Tax authorities, besides a payment of Rs 2-3 crore had been given to Ramesh Gandhi for managing the Registrar of Companies.

After levelling these grave allegations, SFIO goes on to say that since these "allegations regarding payment of bribe are uncorroborated and as the CBI is already seized of the matter, it is recommended that the CBI may further look into this issue." Clearly, SFIO is washing its hands off the affair. Compounding this is a letter dated 3.4.2013 sent to the Central Vigilance Commission by Sudipta Sen where he writes that after he got a letter from SEBI in 2010, Debabrata Sarkar met him and took Rs 5 crore initially and around Rs 80 lakh every month thereafter to settle the SEBI matter. According to SFIO, Sen said that payments made to Sarkar were in cash and whenever cheques had to be issued, they were in the name of Revlon Commercial Company with whom Saradha had no trade dealings.

If the government is using the CBI as an instrumental to belittle the TMC, as Mamata Didi has been claiming in her vitriolic speeches, then the agency would do well to introspect on the role of regulators in this case. For the charges are specific with names and amounts of money included. Shouldn't the ambit of the investigation then be widened, so that these specific charges are probed? We are talking the entire vector of regulators here - SEBI, RBI, RoC, Income Tax and even the Institute of CAs. It is incumbent on both the CBI and the regulators to investigate these allegations thoroughly, for these are the outcome of sworn statements. In the game between the hunter and the quarry in Bengal, the Centre and the CBI both need to be mindful of the "lesser" targets which indicate a complete rot in the regulatory system if true.

Let us now look at MP Kunal Ghosh's deposition on the role of Madan Mitra which essentially helped the CBI nail the sports minister. Ghosh in his deposition said, "High profile personalities from politics and the bureaucracy were associated with the Saradha Group publicly and shared stage with Sudipta Sen. This inspired confidence in the minds of the people." Actually, this was Sen's modus operandi, involve the rich and famous in his scheme to defraud the public. In trying to extricate himself, Kunal Ghosh submitted pictures of Surajit Kar Purkayasta, a former commissioner of police of Kolkata, and of sports minister Madan Mitra attending programmes which were organised by Sen and Saradha companies. In fact, Ghosh pointed out that Mitra was shown as president of the Saradha Employees Progressive Union in one of the pictures and this led to the CBI nabbing Mitra.

The dragnet is closing in on the TMC. Its top deck leadership has been embroiled in one of the biggest ponzi scheme probes ever in India. Equally, the CBI and other agencies like ED need to zero in on the land and media acquisitions by Saradha, for the simple reason that this was all done with investors' money. In this absurd game of acquisitions, it remains unclear what the bigger gameplan was. For instance, land acquisition cost is shown as Rs 19 crore, but the ED and Bidhannagar Police have compiled a land acquisition list which shows 137 acres holding at a cost of  Rs 25.43 crore.

The entire Saradha scam is littered with discrepancies, for even investigators haven't understood the true extent of the scam. The financial architecture of the scam and its magnitude is mind numbing. The personalities and agencies involved are scary. In this forest of political brinkmanship, the larger issue of the role of regulators and accusations of massive bribes should not be lost, for it will be a travesty. Please don't ignore the elephant in the room.