The Enforcement Directorate has taken a step for the relief of the scam victims. According to reports, it will disburse close to Rs 12 crore in attached fixed deposits of Rose Valley Group of Companies in Kolkata to nearly 22 lakh small depositors. These companies lured people to deposit money with them and promised massive returns that never happened.
On July 24, in Kolkata, a special PMLA (Prevention of Money Laundering Act) court asked the ED to transfer the 14 attached FDs (Fixed Deposits). These deposits related to the Rose Valley Scam are valued at Rs 11.99 crore and have been ordered to be transferred to a court-monitored Asset Disposal Committee.
The ED has now started implementing the court orders in keeping with Prime Minister Narendra Modi’s promise during the Lok Sabha campaign. The Prime Minister had assured to compensate the victims of the financial crimes by distributing them the accused’s assets that had been seized by the ED.
The Rose Valley Group has been accused of duping investors of about Rs 17,000 crores in different states. The money was primarily accumulated by raising small investments in the rural areas of at least half a dozen States. According to The Indian Express, the SEBI (Securities and Exchange Board of India) found that the company offered plans with interest rates ranging from 11.2 per cent to 17.65 per cent. The subscription couldn’t be cancelled, and the investor could not get his money back before the end of the tenure.
In July 2013, an investigation uncovered suspicious expenditures in the profit and loss accounts of group companies. The assessment of the balance sheet revealed poor performance by the company and leakage of cash. It also revealed erratic “miscellaneous expenditures” with an almost nine-fold increase in losses.
The company also gave loans and advances amounting to Rs 596 crore during the year, much of it was given to its holding company. Rest was given to its promoter Gautam Kundu. Therefore, SEBI found out that the company did not follow due procedures. It also allegedly violated the guidelines of the Reserve Bank of India and other related financial fraud control acts.
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