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Jaipur: Devnarayan Singh, who is in his late seventies, has been a regular at the office of the Rajasthan Police Special Operations Group (SOG) for the last one month. Here, he is either seen pleading with officials for his lost Rs 5 lakh deposit or crying in some corner of the building.

Singh is one of around 1.46 lakh investors allegedly conned of Rs 953 crore by a credit cooperative society, Sanjivani, which is said to have branches across Rajasthan and Gujarat.

Credit cooperative societies are financial institutions where savings of members are used to offer low-interest loans and returns to other members, and Sanjivani is one of 1,200 such agencies under the scanner in Rajasthan for alleged fraud.

Pinki Meena of Sirohi shares Singh’s pain. Since she and her three sisters lost their brother 20 years ago, she told ThePrint, the four women have been taking care of their parents. Their Rs 20 lakh deposit with Sanjivani, according to her, represented years of savings. Now, she feels lost.

“We sisters never got married. There is no one else to take care of our parents. This was the money we thought would take care of their medical expenses in case we are not there, but now I know it’s gone,” she said. “Even if the government intervenes, who cares for our money?”

Sanjivani Credit Cooperative Society was booked last month for alleged fraud and its premises in Rajasthan are now sealed.

The SOG’s initial investigation has revealed that the society allegedly forged account sheets, payment records and annual transactions to dodge auditors as it duped investors.

Since chairman Vikram Singh’s arrest last month, more details have been coming out about the alleged fraud pulled off by not just Sanjivani, but hundreds of other credit agencies in the state.

Also Read: PMC fiasco shows why it’s time to pull the plug on urban cooperative banks

Oil wealth comes to Barmer

The district of Barmer prospered during BJP leader Vasundhara Raje’s first stint as Rajasthan chief minister (2003-2008) as British energy giant Cairn struck oil here.

A lot of money came in as land price skyrocketed because of oil and mineral extraction. Coal mining in Bhadresh, development of Cairn’s Mangala Processing Terminal and the sixth pay commission, which majorly enhanced salaries of government employees, added to the boom.

With cash came credit cooperative societies. Sanjivani first opened its office in a small apartment at Raicolony on 28 February 2008. By 2012, when Congress leader Ashok Gehlot was chief minister, Sanjivani had started opening branches in different cities of Rajasthan and Gujarat.

One of the SOG officers said such credit societies are still common in western Rajasthan as the literacy levels here are lower than other regions, and banking penetration not nearly as deep as that of these informal financial institutions.

Additionally, credit societies usually offer an interest of 11 to 13 per cent — even 16 per cent in some cases — on deposits, while conventional banks limit it at 3-6 per cent.

According to sources in the Rajasthan Police SOG, the first goal of Sanjivani Credit Cooperative Society was to increase its membership.

In the starting years, several people who invested in Sanjivani were thus given substantial returns in multiple instalments on their principal deposit, which made them develop confidence, the sources said. Loans were dished out too.

However, in 2012, SOG sources said, the company began to claim fake loans in the names of unwitting members, using the documents they had submitted to the agency, including Aadhaar cards and voter ID. Once the amount was sanctioned, it is suspected that the money was parked somewhere else.

An investigating officer said one such case involved a resident of Jhunjhunu, over 540 km from Barmer, who was shown to have taken a Rs 2 crore loan. The man owns a shop where he sells artificial jewellery. When the SOG team visited the person and interrogated him, the officer added, they discovered that he had never applied for a loan at all, and had instead made a fixed deposit of Rs 65,000 with Sanjivani.

Other victims have been traced as far as Jaipur, Tonk, Bundi, Jodhpur, Pali and Sirohi.

The investigation has revealed that, to generate fake loans, officers of the society distributed commissions to the tune of Rs 150 crore, which allegedly enticed the financial advisers on board to bring in more investors.

‘Dummy chairman and attempt to drown files’

One of the key points of investigation for the SOG is how exactly the fake loans were generated and the documents used in the exercise.

Crucial evidence in the case — tucked into 55,000 files of bogus claims running into 22 lakh pages — was close to destruction but police managed to save it at the last minute in September, sources said.

Soon after the Sanjivani chairman was arrested, the basement of the society’s office at BJS Colony in Jaipur was found to be filled with water — a deed in which employees are suspects — and all the files were submerged, the sources added. The SOG team, however, managed to fish out the files, which are now being restored.

The investigation so far has revealed that the society claimed to have opened close to 28 branches in Rajasthan and five in Gujarat, SOG sources said. While the account books showed rent and salary payments for dozens of more branches, the SOG is said to have discovered during field visits that none of these existed.

The accounts have also allegedly revealed details of fund transfers to the tune of Rs 15 to 20 crore to foreign accounts. However, no documents could be traced to substantiate this filing, the sources said.

According to sources in the SOG, employees with access to important information are now helping them look at Vikram Singh’s offshore properties to determine whether he has parked funds in the assets and real estate he is said to own in three continents — New Zealand (Australia), Ethiopia (Africa), and Dubai (Asia).

An officer in the SOG said representatives of the agency may soon visit Ethiopia and the other countries where Vikram Singh has assets. Once the anti-money-laundering agency Enforcement Directorate comes into the picture, these assets will be attached to pay off the money Vikram Singh owes, the source added.

Police suspect that Vikram Singh appointed an employee identified as Naresh Singh Soni, a cashier in the society for four years, chairman in 2018 to make him the front for the entire operation.

Soni and three others have been arrested for allegedly working in connivance with Singh.

When ThePrint approached Vikram Singh’s lawyers for comment, they said the matter would be defended in court.

“When the case comes up… we will prove how this was an honest enterprise and no corruption was involved,” one of them said.

Ashok Rathi, a civil engineer in his mid-forties, worked as a manager at a branch of the Sanjivani credit society for five years. Rathi, who claims to have diligently perused the company’s books, says he is taken aback by the allegation of fraud.

“Sanjivani got an A-star rating for five consecutive years from the government’s cooperative department. This was only after an audit,” he added. “Who thought all of this was fudged?” asked Rathi, whose family members deposited a total of Rs 30 lakh with Sanjivani.

Also Read: Decoding the ‘scam’ that has lost 20,000 people Rs 5,000 crore in Bengaluru

‘Fishy details’

According to top sources in the Rajasthan cooperative department, which issues licences for such operations, the state started probing these agencies when “half the credit societies registered with the Jodhpur division” were found to have “fishy details”.

It was found, the sources said, that officers in the department — from additional registrars to clerks — had themselves taken loans from these credit societies.

Additionally, sources said, a former inspector at the registrar’s office in Sirohi established a credit cooperative society after retirement, while a colleague at the Pali deputy registrar’s office was married to a woman who owned one.

SOG officials claimed that a perusal of account books had revealed quid pro quo at play — government officers didn’t repay their loans to credit societies on time, and although audit reports kept noting this, no step was taken to address this because the government functionaries, in turn, ignored irregularities at the agencies.

Over 35 of nearly 68 credit societies in Jodhpur were reportedly found to show only deposits and no returns or loans, which hints at a bid to dupe investors. However, none of these societies has been liquidated yet, ThePrint has learnt.

Irregular ways were also allegedly adopted to register societies. The usual procedure in the state is to get an agency registered by the deputy registrar or assistant registrar at the district level. But in 2009, sources in the SOG said, the cooperative department’s Jodhpur zone issued a new direction, under which approval from the zonal office is mandatory before a nod is sought from the assistant or deputy registrar.

Investigators are looking at this as a potential way to breed red-tape, and thus corruption, in the registration of credit agencies.

Furthermore, as irregularities came to the fore over the years, inspections were conducted by additional registrar-rank officers at each of the societies. Although the ensuing reports did note irregularities, the sources said, they did not name any official.

Sanjivani ‘just tip of the iceberg’

The first big cooperative society netted for alleged fraud this year was Adarsh Credit Cooperative Society, which is accused of embezzling Rs 1,400 crore. Navjeevan Cooperative Society, accused of conning depositors out of Rs 400 crore, was next. Sanjivani was the third.

Investigators believe there might be hundreds more that might be caught as the investigations continue.

SOG sources said that of the 50 cooperative societies with the biggest deposits in Rajasthan, deposits in 12 alone totalled Rs 25,000 crore.

Many of these investors who reside in remote areas do not bother to withdraw the principal amount once heavy returns are earned, but, slowly, as news of the alleged scam spreads, more FIRs are being filed.

On 3 October, more than 50 victims got two FIRs registered against Sanjivani and Navjeevan for allegedly usurping crores of rupees.

Asked about the scams, the state’s Congress government said the investigation was underway.

“The chairmen of such societies have been arrested and currently another seven are under the radar of the government,” Rajasthan Minister of Cooperation Uday Lal Anjana said.

Centre has law against such fraud

According to the investigating officer who conducted the preliminary inquiry in the case, Rajasthan lacks the legislation to deal with such fraud by credit societies.

A central legislation, the Banning of Unregulated Deposit Schemes Act 2019, came into effect on 21 February this year to help the government crack down on such fraud.

Under the Act, for investigations at the state level, the government is supposed to appoint a secretary-level officer. A special court with the powers of a district judge is to try the cases, and the assets and bank accounts of guilty societies can be seized.

It lays down jail time of up to 10 years and fines to the tune of Rs 25 crore or triple the amount of profits earned.

However, the Act does not automatically apply to the states and it is up to a state government to implement it. Since the Act is yet to be implemented in the state, Rajasthan investigators are only relying on provisions of the Indian Penal Code to prosecute fraudulent credit agencies.

But the Act may soon come into effect in the state. ThePrint has learnt from government sources that the Act is likely to be introduced in the state assembly by the next session.

Meanwhile, Brijesh Singh, one of the agents who worked on getting investors for Sanjivani, is scared to even step out of his home these days. A resident of Tonk, near Jaipur, Singh said he was often harassed by frustrated investors looking to reclaim their money.

“One of the most important lessons for me is to never ask anyone for financial investment unless the company is truly verified. Even Sanjivani was rated A by auditors,” he added. “But look what happened… How long do I lie to these poor investors, some of whom invested a lakh after saving for years.”

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