Kunal Ghosh, former Trinamool Congress MP and an accused in the Saradha scam, recently made a failed attempt to commit suicide while under custody. Ghosh had headed media organizations of the Saradha group which allegedly cheated thousands of investors of crores of rupees. Those who have lost money include rickshaw-pullers and daily wage earners, for whom every single rupee counts. Ghosh has protested that the investigating agencies have not bothered to quiz West Bengal Chief Minister Mamata Banerjee and some other big politicians who can throw more light on the scam. Implicit in his statement is the fact that the big rip off couldn’t have gone unnoticed by the highest personages in West Bengal. High or low, most people of West Bengal and the neighbouring states have felt of the heat of the scam. I pity especially the people whom the cheats have robbed of their life’s savings.
‘Pity them not their present misery,’ said Kaga Bhushundi Ji, ‘pity them their greed.’
Kaga Bhushundi SpeakEth
Suman K Sharma
‘Kaga Ji, you are a mean minded crow,’ I said.
‘Call me anything, son, but the world that you live in is full of enticements. In return of less that you give, you fall for many times more in no time. Your hundred rupees will bring you 120 or even 130 in a matter of months with a little effort from your side – so they say. I can tell you of a Russian ‘business’ they call ‘MMM’ which can make your 5000 rupees a full crore in just a year’s time! Such is the lure of ponzi schemes. The smiling face at the other end says just bring more and more of people with their 100 rupees, relaying to them the same promise of hefty returns. Initially, the contributors do get the promised profits. And a chain of investors is soon formed of eager depositors waiting for improbable returns. The stakes get bigger as they receive bloated interest on smaller amounts. The numbers grow with greed. Then, one fine morning, the smiling face disappears altogether, with huge amounts it collected from lakhs of people….’
‘Hold a minute, Kaga Ji. You said that the face behind a ponzi scheme does initially give 120 in return of a hundred rupees. How does that happen? Does the schemer invest the moneys in businesses earning hyper profits? He or she couldn’t be paying from own pocket!’
‘Indeed. A ponzi scheme may pretend to be involved in housing, forest, infra-structure development, but in actual fact, it does nothing of the sort, except playing with human greed. The payments it makes to the initial investors come from the deposits of the new investors. ‘A’ makes a deposit of 100 rupees and brings another ten ‘B’s with their hundreds. ‘A’ gets 20 or 30 rupees on her investment since she has brought a thousand rupees to the scheme. Then each of ‘B’s, like the poor honey bees you see buzzing around in search of nectar, cajole ten ‘C’s to earn their own returns and the cycle goes on. But it cannot go on indefinitely, since the accumulated amount is never used for productive purposes, but to fill pockets down the line. You can perhaps build castles in air, but you cannot sustain such trickery forever. ‘
‘If that be so, why don’t the investors withdraw their money in good time like they do from banks?
‘Some of them actually do – in initial phases – and that is how ponzi schemes manage to establish credibility in public mind. But as the chain grows, it becomes hard for the investors to quit because of the lure of easy money.’
‘Is not government doing anything to prevent such scams that rob the poor and starve the industry of investments?’
‘What can a Government do, son, if people are bent upon ruining themselves? Your Government itself is not entirely without blame. First, it keeps for itself the largest share of public savings, and then it borrows from the captive market at interest rates much below the level of inflation. Won’t then the likes of a rickshaw puller fall for promises of high returns which the crafty schemers don’t intend to keep?’
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