Rose Valley raised Rs 15,000 cr — six times that of Saradha — from investors

The group has 900 branches spread over several states including West Bengal, Orissa, Bihar, Assam, Punjab, Delhi and Andhra Pradesh. The ED found that the group has returned Rs 900 crore to its investors on maturity while in several cases it redeposited the money.

The senior officials of the company are now under the scanner of the directorate.

However, unlike the Saradha Group, in which FIRs were registered by police and the CBI, ED has taken up the investigations into the working of the Rose Valley Group on a complaint registered by the Securities and Exchange Board of India and another by Orissa government.

On Thursday, group chairman Gautam Kundu visited the ED office and requested the officials to de-freeze the 2,500 bank accounts it had sealed since September 19.

However, after coming out from the ED office, Kundu claimed that Rose Valley was not a chit fund company. “Do not confuse us with Saradha. We are not a chit fund company. We are still raising money through time shares. We are a time share company. We will not default on investors payments. Moreover, we are a cash-rich company and we have Rs 10,000 crore assets,” he said.

Significantly, on June 18, market regulator SEBI had issued an order to Rose valley group asking it to wind up its collective investment schemes (CIS), issued through its real estate and construction arm — Rose Valley Real Estates and Construction Ltd (RVRECL) —- and repay investors within three months.

In the 21-page order, SEBI observed that a scheme run by the RVERCL fell into the category of CIS. “Up to January 2014, a total amount of  Rs 700 crore has been refunded for the period April 2013 till January 2014. The total amount due to customers is approximately Rs 200 crore,” the order said.

Significantly, the Rose Valley had claimed that the collective investment scheme was discontinued in 2010.

The SEBI order further states, “RVRECL, vide its letter dated August 20, 2010, has submitted that it has mobilised Rs 1271.98 crore till March 31, 2010 under the scheme and has made a refund of  Rs 342.20 crore to those investors who opted for the ‘credit value’ instead of the land booked. The land bank of the RVRECL consists of plots located in various areas of West BEngal namely Rajarhat, Durgapur, Salboni, Jhargram, Bankura, Saltora, Bagnan, Malbazar, Siliguri, Birbhum, Malda, Ranaghat and places in other states inter alia Agartala (Tripura), Chindbara (MP), Orissa etc.”

Significantly under the scheme, the company used to allot plot to its investors. The SEBI order said that while RVRECL claimed that it had provisionally allotted 5,08,792 kattas of land to the investors, “it had actually handed over only 9,132 kattas, which is a very small fraction (1.79 per cent) in comparison to the land provisionally allotted”.

The order further reads that RVRECL, through a letter dated August 20, 2010, had submitted that it had mobilised Rs 1271.98 crore till March 31, 2010 under the “Ashirbad” scheme and has made a refund of Rs 342.20 crore to the investors. According to the SEBI order, the “Ashirbad” scheme money increased from Rs. 1,358 crore to Rs. 2,016.32 crore during April 1, 2010 to March 31, 2011.

The Rose Valley Group came into focus after Saradha group went bust last year. The  group has interests in areas ranging from films and media to construction and hospitality and was one of the main sponsors of Kolkata Knight Riders IPL team for two years.