14 chit fund companies raided in Bihar, 11 arrested

Bihar police raided offices of over a dozen chit fund companies on the outskirts of state capital.

Updated: Apr 28, 2013, 23:16 PM IST

Patna: Bihar police on Sunday raided offices of over a dozen chitfund companies on the outskirts of state capital and arrested 11 persons from whom Rs 8 lakh was seized.

On a tip off about activities of chitfund companies in Bakhtiyarpur, Barh and Mokama areas of rural Patna, a special team was formed which conducted raids in their offices, a release from the office of Senior Superintendent of Police said.

Raids were conducted on offices of 14 chitfund companies majority of which showed their headquarters in Kolkata, it added.

The crackdown came in the backdrop of the Saradha Group chit fund scam that has rocked West Bengal and neighbouring states.

On the basis of socuments seized, it has come to light that roughly 25,000-30,000 people of these areas have invested their money in these non banking companies, the release said.

Eleven persons were arrested and Rs 8 lakh cash recovered in the raids, the release said.

Besides, 1700 passbooks, 10,400 bond papers, maturity certificate and 50 cash books were seized, it added.

During interrogation, it came to light that these chitfund companies used to open offices at smaller places and lured citizens with a promise to multiply their money by five to 10 times. They provide fat commission to local agents to motivate locals to put money in their companies.

Every company on an average was collecting money to the tune of Rs 15-20 lakh daily through this operation, the release said, adding the money collected was deposited by local manager in companies` account which their bosses sitting in Kolkata would withdraw.

The police said that properties of those arrested would be auctioned to return money of poor investors.

Bihar Deputy Chief Minister Sushil Kumar Modi, who is also state`s Finance minister, had directed officials to monitor operation of chitfund companies active in Bihar in the wake of the Saradha scam.