Indian police arrest businessman amid allegations he duped thousands of investors

SRINAGAR, India – An Indian businessman who allegedly duped hundreds of thousands of small depositors in eastern India after promising them huge returns on their investments has been arrested, police in Indian Kashmir said Wednesday.

Sudipta Sen, who heads the Saradha Group, and two colleagues were arrested in the tourist resort area of Sonmarg late Tuesday on information from West Bengal police, police official Shahid Mehraj said. Sen will likely be handed over to police from West Bengal state, where his company was based.

Sen disappeared from the state capital of Kolkata two weeks ago after depositors began complaining that their savings with the group had disappeared and the local government ordered his arrest.

Saradha Group is the biggest deposit-taking company in the state and its collapse earlier this month left hundreds of thousands of depositors and thousands of agents across the state with painful losses. The company accepted deposits as low as 10,000 rupees ($180), and most of the depositors and agents belong to poor families.

According to news reports, at least three people killed themselves this month after failing to recover their money from the company. Two were agents for the company unable to recover their clients’ funds and the third was a house maid who had deposited her life savings with the company.

India’s market regulator has ordered the group to return all investor funds within three months.