CBI raids 60 sites, seizes documents in chit scam

The Central Bureau of Investigation (CBI) searched nearly 60 places across six States on Friday as part of the investigation into a chit-fund scam allegedly involving Basil International Limited “Searches have been carried out at various branches of Basil International in Delhi, Assam, West Bengal, Jharkhand, Uttar Pradesh and Maharashtra. A huge pile of documents pertaining to the case has been seized for scrutiny,” a CBI official said. The case is one of the 250-odd registered by the CBI against 130 firms accused of running Ponzi schemes, such as the Saradha Group, the Daffodils Group and Rose Valley. High returns promised The alleged scam was first intimated to the Securities and Exchange Board of India by the Income Tax Department in June 2011, stating that the company was engaged in the business of taking deposits in the garb of redeemable preference shares from rural people by offering returns ranging from 11% to 14%. “The money so mobilised was used to pay huge commissions to agents, invest in business assets and fixed deposits and siphoned off in cash. The company was alleged to be running a Ponzi scheme where its liabilities were met using the deposits,” the SEBI said in one of its orders. The company had been allegedly paying maturity amounts by raising funds from other business entities. The Income Tax Department found that the company had mobilised about Rs. 960000000 by March 2011, besides allegedly giving clearance to issue preference shares for Rs. 1020000000 by the next financial year. The company continued to issue share certificates till March 2012. When questioned by the SEBI, the firm was unable to furnish the number of investors despite several notices. In its interim order in May 2013, the board issued show-cause notices to its 12 directors and promoters.