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Real estate, cows, goats and TV channels have one thing in common: chit fund companies. It’s a familiar business model, and has been practised many times across many states. And it never fails to summon up at least a few scores of gullible souls. Step one: set up a company that sells land or cattle. Step two: Start a news channel to publicise your company’s products; add a newspaper or magazine if you have spare cash, and use them as well to gain influence. Step three: woo gullible investors while authorities look the other way. Step four: rake in the moolah. Step five: pray.
Ask Nirmal Singh Bhangoo, whose Pearl Group owned the P7 channel before it went kaput. Ask Subroto Roy, who launched Sahara TV and a clutch of newspapers in several languages. Ask Kunal Ghosh, who invested money from the Saradha chit fun in several TV stations. Ask Samruddha Jeevan Foods, which started Live India. Ask the Sai Prasad group, which runs the News Nation. Ask...
Ask, in fact, most of the 33 companies which were behind the ponzi schemes investigated by the CBI in 2011 following a Madhya Pradesh High Court order, and you will find a media plan in the PowerPoint presentation of its promoters. Partly to draw in investors and partly to use its presumed power to stay away from the long arm of the law.
All may not have a pan-India presence, which is why KMJ (or Kaila Mata ki Jai) land developers run KMJ Channel News, a local TV station from Gwalior. Parivar Today, published by Parivar Dairy and Allied Limited, has a daily print run of over 40,000 copies, mainly out of Madhya Pradesh. BPN real estate and allied runs BPN Times. The list goes on.
“When I first started taking action against these chit fund companies, it was easy to understand why TV channels and newspapers started reporting against me,” says former district magistrate of Gwalior Akash Tripathi. “Journalism not only gives chit fund companies a veneer of respectability, but some much-needed protection as well when it comes to circumventing the law.”
Elsewhere, in the erstwhile ponzi capitals of India, Orissa and West Bengal, the pattern is similar. Some 200 ponzi schemes in these states managed to cobble up over Rs 10,000 crore from 25 lakh customers. The Saradha group that went bust controlled three TV stations, including Tara News and two English newspapers, Bengal Post and Seven Sisters Post, and the Bengali daily Sakalbela. The Rose Valley chit company still runs News Time Bangla, a 24-hour TV station from West Bengal.
The media hopes of Oriya chit fund companies’ were short-lived when the Supreme Court ordered these companies shut. Seashore TV or STV Artha Tatwa’s Kamyab TV are two media houses promoted by chit fund companies.
But why are so many chit fund companies doing business in the garb of selling cattle? Dairy companies are not regulated by SEBI. Which is why most customers are enticed to invest in a cow or a goat. Samruddha Jeevan has gone a step ahead. The CBI report says its customers didn’t need to invest in a full goat, just a few kilograms of it would do!