Human cost of a ponzi scheme


A ponzi scheme is an investment operation that pays returns from the money paid by subsequent investors rather than the profit generated by the operations of the enterprise. Hence this is considered fraudulent.
Today, I will tell you about one such incidence. This ponzi scandal is popularly known as Saradha group financial scandal. It all started in Eastern India. This group was running a couple of companies to channelize funds collected from the common man. On the face of it these companies showed doing genuine business, however the real drama unfolded in the month of April 2013. The group collapsed.
The estimated loss was US$4 to 6 billion. Number of people impacted were 1.7 million. A farmer in Sonarpur deposited Rs 10000 with Saradha. It was his entire year’s savings. Shakuntala Baidya of Raidighi was saving Rs 5 per day in her piggy bank till she had a corpus of Rs 10,000. In her words the company had promised her a return of 400%. The money was for her daughter’s marriage. When she heard that the company had downed shutters she did not know what to do. Overnight friends became enemies, children stopped going to school, arrangement for marriages came to a standstill. People even committed suicide. Suddenly everything became vicious.
Fortunately strong action was taken by the government. A judicial enquiry commission was set up to investigate the matter. A relief fund was set up to compensate the loss. Some people have reportedly got their money back.
But the question is does it happen this way every time? Do always people get their money back? What happens to those lost smiles? Three basic needs of a human being are food, clothing and shelter. These type of ponzi schemes takes away all leaving nothing behind.