EXPLAINED: West Bengal's Rose Valley ponzi scam

Kolkata: With back-to-back arrests of two Trinamool Congress MPs in West Bengal - Tapas Pal and Sudip Bandyopadhyay, the eastern state has once again started to draw attention from the world for its connection with ponzi scams. 

The Rose Valley chit fund scam, involving funds of over Rs 15,000 crore, is being touted as the biggest Ponzi fraud in the country – thus making the chit-fund scam seven times bigger than the Saradha scandal, that had rocked West Bengal in 2013-14. 

Rose Valley chairman Gautam Kundu has been languishing in jail since March 23, 2015.

Rose Valley was set up in the 1990s by one Kajal Kundu, who started off as an LIC agent. The company graph rose sharply within a short period of time after the business passed from the hands of its original owner Kajal Kundu to his brother to his brother Gautam Kundu, after his sudden demise. 

As per the investigation, it was revealed that Rose Valley Hotels and Entertainment Ltd (RVHEL) launched a scheme called Rose Valley Holiday Membership Plan in 2010. 

Investors could book a holiday package by paying in monthly installments. Upon maturity or completion of the scheme tenure, they could opt for a holiday, which included hotel accommodation and services, or a return on the investment with annualised interest. 

Market regulator SEBI found the company offered plans with interest rates ranging from 11.2% to 17.65%. The subscription couldn't be cancelled and the investor could not get his money back before the end of the tenure.

SEBI estimated that the company had garnered over Rs 10,000 crore without regulatory approvals. 

After initial investigations, it was found that RVHEL was running a 'Collective Investment Scheme' without the necessary approvals and registration with the regulator. 

Around the same time that Sebi began its investigations, Assam Police registered a case against Rose Valley for collecting Rs 1,006 crore through the holiday membership scheme until February 2012. 

CBI later accused chairman Gautam Kundu and three others of defrauding investors from across the country to the tune of over Rs 17,000 crore.

Allegations against Sudip Bandyopadhyay:  

Trinamool Congress MP from north Kolkata, Sudip Bandyopadhyay is accused of using political influence to increase the business of Rose Valley. 

According to another report, huge transactions is said to have taken place between Sudip and Rose Valley with RVHEL chief Gautam Kundu meetings him even at his Delhi flat.

Vouchers of a firm issued on Sudip’s name was also found from the secret chamber of Rose Valley's DLF building.