Kolkata: The Enforcement Directorate (ED) on Wednesday arrested Gautam Kundu, the owner of the Rose Valley group for running ponzi schemes. According to the ED officials, Rose Valley has raised nearly Rs 12,000 crore through illegal schemes, and was the largest of the ponzi operators – much larger than the Saradha Group - based out of Bengal.

Kundu was arrested after five hour long interrogation in the evening ED sources claimed that the Rose Valley owned by Kundu has been collecting money under collective investment scheme (CIS) inspite of repeated warnings by SEBI. “Of late, the company has been raising public money through cash vouchers,” said an ED official.

“The Rose Valley chief has not submitted documents related to his money marketing business pertaining to our investigation. He has been also trying to change names of a number of companies he owns in an illegal manner,” added the ED official. 

ED sources said that by the end of the year 2012 when the Saradha group of companies was in doldrums before it finally closed down in April 2013, Kundu had floated the proposal to buy a few companies of the Saradha group. In August 2011, at a five star hotel in the EM Bypass Kundu took active part in a meeting of some ponzi scheme companies’ owner which was attended by the state transport minister Madan Mitra already arrested in the Sarada Realty case.” He also could not provide any satisfactory answer to the fact on how he would return the sum of Rs 3.5 thousand crores to the investors. He had raised this amount from public, the balance sheet of his company till March 2014  states this clearly.” Said an ED official.

ED had already attached 2,631 bank accounts of the group involving Rs 295 crore, under Section 5 of the Prevention of Money Laundering Act and summoned Kundu on various occasions.

Rose Valley floated over two dozen companies, only half of which were active. According to the Facebook page of the group, Rose Valley has investments in food processing, ITeS, nearly two dozen of hotels and others. The flagship company was incorporated in 2001 by Gautam’s brother Kajal.

Gautam assumed the leadership in 2002.