The Serious Fraud Investigation Office (SFIO) has arrested Apurba Kumar Saha and Kailash Chand Dujari in connection with running ponzi schemes in Bengal and neighbouring states and defrauding lakhs of people.

Saha, who founded Pailan Park Development Authority Ltd, allegedly duped investors of ₹535 crore, according to the SFIO, a wing of the ministry of corporate affairs under the central government. Dujari, who ran an entity named Amrit Projects, swindled ₹129 crore of investors’ money, the SFIO alleged.

This is the second instance when the Pailan chief is being arrested for running Ponzi schemes which broke the back of many rural households financially in Bengal in the early part of last decade.

The CBI arrested Saha in October 2019 but he managed to secure an interim bail from the Calcutta High Court in December 2022. He was on bail until today.

Dujari and Saha were produced before the Special Court that deals in cases lodged under The Companies Act, 2013 in Calcutta on Thursday. The court remanded the accused for four days in SFIO custody, as further investigation is undergoing.

According to the SFIO, Pailan Park collected ₹535 crore from 5 lakh investors while Amrit raised ₹129 crore from 1 lakh investors under multiple schemes.

By definition ponzi schemes, which are also called pyramid schemes, pay returns / profits to the earlier investors with funds collected from more recent investors. These schemes do not have approval of any regulatory authority and operate illegally.

The investigation of the SFIO revealed that part of the funds collected by these two entities were siphoned off to purchase properties and / or diverted to various other entities and individuals. Several shell companies were floated by the promoters to move the money around.

These companies played the same notorious playbook deployed by Saradha and Rose Valley group, who defrauded thousands of crores from eastern states.

A joint research conducted by two universities in the UK and in Calcutta had warned in September 2023 that a new generation of ponzi schemes in the guise of investment in Nidhi schemes, cryptocurrencies are on the rise in rural Bengal and could implode sometime around 2028-30.

“The purported rapid success of these new scams show that the general population has already forgotten about the 2013 implosion (Saradha scam) and is again ready to go on yet another ride of promises and despair,” researchers from NUJS Calcutta, University of Leicester and University of Sheffield had said then. The researchers had proposed changes to the legislation as a measure to check the scams.