Chit Fund Scam: Orissa to e-auction attached assets to repay small investors

This was the first such order to be passed by a designated court. The OPID Act has the provision of selling the properties of chit fund firms for repaying the defaulted depositors.

In order to quickly repay small investors cheated by scores of chit fund firms, Orissa government now plans to e-auction the attached properties of such firms through web portal of state-owned MSTC.

Earlier, the state announced that people who were cheated of a maximum amount of Rs 10,000 or less by these firms would be described as small investors and would be given priority in getting refund from the Rs 300 crore corpus fund, as well as money raised from the sale of attached properties of ponzi firms.

In Orissa, chit fund firms collected around Rs 4,600 crore by defrauding about a million people. To make the punishment more stringent, the state also announced that offences under the Orissa Protection of Interests of Depositors (In Financial Establishments) Act, 2011, would hence be cognisable, non-bailable and non-compoundable.

The government plans to go ahead with e-auction of attached properties of Calcutta-based Rose Valley Group, after a designated court under the OPID Act in February this year passed an ex-parte order for confiscation of the company’s properties.

This was the first such order to be passed by a designated court. The OPID Act has the provision of selling the properties of chit fund firms for repaying the defaulted depositors.

Sources said the Justice (retd) A S Naidu Commission of Inquiry has been asked to quickly prepare the list of investors in Rose Valley Group so the compensation is not delayed more. While the commission is likely to take six more months for completion of date entry of 1 million-odd affidavits from investors, the state has asked it to prepare list of investors of Rose Valley, Golden Land Developer Group, Ashore Group, Sastra Enterprisers, Nabajyoti Reality Indian, Safex Infra India and SLB Multi State Cooperative Society.

Source:: Indian Express