Tainted chit fund firm got govt patronage, says Orissa minister

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Even as the Central Bureau of Investigation continues to conduct raids on chit fund firm Seashore Group at several places in Orissa, state Cooperation and Excise Minister and senior BJD leader Damodar Rout on Thursday created a sensation, saying the chit fund firm not too long ago enjoyed the patronage of the Naveen Patnaik government.

“The Seashore Group enjoyed the patronage of the state government. The company was handed over 11 hospitals through the state NGO committee. Besides management responsibilities of tourism spots and cold storages were given to the company. Whoever had given the permission, be it the then secretary or minister, the government is liable, since it is a collective responsibility,” Rout told a local TV channel, causing embarrassment to the ruling party.

So far, the CBI has interrogated two BJD MLAs, raided the house of an MP and summoned some others.

Rout said when he was the health minister, he inquired about the handing over of hospitals to Seashore. “I was told that as per NRHM provisions, the district level NGO committee headed by district Collector and state level committee headed by Health Secretary can recommend NGOs to run hospitals without any permission of the minister concerned,” Rout said. “I asked whether these committees are above the state government, but there was no response.”

He further alleged that government had signed an MoU with the Seashore Group to set up a power plant in the state and also allowed the company to set up a maize processing plant in tribal-dominated Nabarangpur district. “Even there was a bid to hand over Urban Cooperative Bank, Bhubaneswar to Seashore which could not be done due to my opposition,” Rout said.

Incidentally, the Central Economic Intelligence Bureau of the Department of Revenue in March 2011 had informed the state government about illegal money circulation activities of Seashore Group. In a letter to then chief secretary, it had warned that the Seashore Group was luring depositors by offering unreasonably high interest rates. But the interest paid has been shown in the accounts of the company as dividends and has been paid out of the deposits collected from the investors.

“As such, the company has no commensurate business income to make such huge interest payments. In effect, it is running a money circulation scheme,” the Additional Director General of the Central Economic Intelligence Bureau wrote in his letter.

Despite the warning, the Orissa tourism department signed MoU with the company to develop water sports in the Mahanadi in November 2011.

Rout alleged that Rajya Sabha MP Pyari Mohan Mohapatra, who was expelled from BJD in June 2012 over an alleged coup attempt against Naveen Patnaik, was involved in Seashore as its CMD, Prashant Das, was his follower. The Rajya Sabha MP, however, rubbished Rout’s allegation saying the minister should submit evidence regarding before CBI.

Seashore company had opened 42 branches across the state and invested in a number of projects including the hospitals, travel agencies, products, retail outlets, media business, credit cooperatives and multi-purpose projects.

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