Companies & Sectors
Sumangal group's MD arrested for money laundering, ponzi schemes

Police arrested Subrata Adhikari, MD of Sumangal group on charges of money laundering and for running a scheme of “potato purchase” investment, promising up to 100% gain in just 15 months

Cracking down on a “potato purchase” illegal investment scheme promising up to 100% gain in just 15 months, Kolkata police has arrested Subrata Adhikari, managing director of Sumangal group from Mumbai, says a report from the Hindu Business Line.


Quoting Pallab Kanti Ghosh, Joint Commissioner of Police (Crime), the newspaper said, “A team of Kolkata police officers from the Detective Department arrested Adhikhari from a guest-house yesterday night.”


Last year in July, market regulator Securities and Exchange Board of India (SEBI) had the Kolkata-based company to wind up its 'potato purchase investment' scheme and refund money in three months to investors.


The Sumangal Group had been involved in various deposit-taking and ponzi schemes in West Bengal and the neighbouring states. Money collection was made through the ‘Flexi Potato Purchase Scheme’. It was promising investors 20%-100% return on their investments within 15 months through a scheme involving purchase and subsequent sale of potatoes.


SEBI had begun a probe into the matter after it came across a newspaper advertisement in Kolkata by Sumangal Industries, wherein it was soliciting funds from the public under a “Flexi Potato Purchase Scheme.”


The regulator had subsequently informed the company in October 2012 that no entity could carry on or sponsor or launch a collective investment scheme without its approval. It also said the company would have to submit certain documents to obtain the certificate.


However, the company in its reply to SEBI said it was trading in potatoes for which it had a trading licence and it was dealing in agricultural and non-agricultural products within and outside India.


Sumangal group also denied that it was running a collective investment scheme and submitted that the question of obtaining a certificate of registration from SEBI did not arise.


According to reports, the charges levelled against Adhikari include money laundering and raising money through ponzi schemes. The group is allegedly said to have amassed deposits upwards of Rs100 crore, the report says.


In December 2013, some 5,000-odd depositors had staged an agitation and lodged a complaint at the Shakespeare Sarani police station against the group for non-payment following the maturity of these Potato Flexi Bonds.


Complaints were lodged after the investors found the Sumangal Group closed its offices and the directors, including Adhikari, went absconding, the report added.


Fine Print

Should Insurers Sell Only Term Plans?

The Gujarat High Court issued notices to...

Premium Content
Monthly Digital Access


Already A Subscriber?
Yearly Digital+Print Access


Moneylife Magazine Subscriber or MSSN member?

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
US sugar plant removed safety device 13 days before temp worker’s death

Janio Salinas was buried alive in sugar. A newly released accident report and an undercover investigation by Univision reveal the obstacles OSHA faces in its temp worker safety initiative.

This story was done in collaboration with Univision.

Inside the sugar plant in Fairless Hills, Pa., nobody could find Janio Salinas, a 50-year-old temp worker from just over the New Jersey border.

Throughout the morning, Salinas and a handful of other workers had been bagging mounds of sugar for a company that supplies the makers of Snapple drinks and Ben & Jerry's ice cream. But sugar clumps kept clogging the massive hopper, forcing the workers to climb inside with shovels to help the granules flow out the funnel-like hole at the bottom.

Coming back from lunch that day in February 2013, one employee said he had seen Salinas digging in the sugar. But when he looked back, Salinas was gone. All that remained was a shovel buried up to its handle. Then, peering through a small gap in the bottom of the hopper, someone noticed what appeared to blue jeans.

It was Salinas. He had been buried alive in sugar.

As harrowing as the accident was, federal safety investigators recently discovered something perhaps even more disturbing: A safety device that would have prevented Salinas' death had been removed just 13 days before the accident because a manager believed it was slowing down production.

After a series of gruesome accidents involving untrained temp workers, the U.S. Occupational Safety and Health Administration (OSHA) has stepped up its enforcement of rules affecting temp workers. In recent cases, OSHA has held companies and temp agencies jointly responsible for training, and it has fined temp agencies for not assessing potential dangers before sending people to a workplace.

But the federal report on the accident that killed Salinas reveals how deeply rooted the problems are—and how difficult a challenge OSHA faces in changing the way temp workers are treated.

The Salinas case is featured in a new investigative report by Univision, airing tonight on its news magazine show, Aquí y Ahora. The report also features undercover video from the growing blue-collar temp world. Earlier this year, the Spanish-language TV network sent two producers to work for temp agencies in an immigrant neighborhood in New Brunswick, N.J. From there, the agencies provide workers to local warehouses to unload goods coming in from overseas.

Univision quickly learned that the agencies weren't following employment rules. At five of the seven agencies they visited, the employment forms the producers received were in English, even though they spoke Spanish and the overwhelming majority of workers who use the agencies don't speak English. One producer was asked to sign a safety quiz that had already been filled out. When they got to the warehouses, both men were sent to work without any training.

The temporary staffing business has been one of the fastest growing industries since the end of the 2007-09 recession. It now employs a record 2.9 million people in the United States. But the growth in blue-collar staffing has led to high injury rates and complaints about exploitation.

Last year, ProPublica found that temps face a significantly greater risk of getting injured on the job than permanent employees. In Florida, for example, temps were about twice as likely as regular workers to suffer crushing injuries, dislocations, lacerations, fractures and punctures. In Florida and the three other states for which records were available, temps were about three times as likely to suffer amputations.

At the time of the sugar plant accident, every employee at the Pennsylvania warehouse, which is run by CSC Sugar, was a temp worker. Even the warehouse manager, who ran the operation, was a temp although he was promoted and given raises by CSC managers and had authority to purchase materials and hire contractors on behalf of the company. Workers told OSHA that the only contact they had with their temp agency was when they had a payroll problem.

The warehouse manager told OSHA that he had complained repeatedly to upper management about the dangers of becoming engulfed while unclogging the sugar hopper. He said he had asked the plant manager for a safety device to prevent clogging, but the plant manager said "we can't do that" because of financial constraints.

Eventually, the company decided to install a screen over the hopper to prevent clogging. But 13 days before the accident, according to OSHA, the plant manager ordered it removed because it was slowing down production.

Around the same time, the plant had a near miss when a worker started to slide into sugar while unclogging the hopper. That worker was able to get to the side in time, the report said. Despite that scare, the screen was never put back on.

The plant manager leading up to the accident told OSHA he was unaware of the problems and didn't know the screen had been removed. "However, statements by employees indicated he had directed its removal," OSHA investigators wrote in their report.

CSC Sugar had been fined by OSHA in 2010 for failing to train temp workers at another plant. CSC said at the time that it depended on the temp agencies to train them. Despite the warnings from OSHA, several temp workers at the Fairless Hills plant said they too had never been trained by CSC.

Andy Reul, the company's chief financial officer, declined to comment, citing potential litigation.

Salinas, who had been an airplane mechanic in Peru before coming to the United States in 1990, died of asphyxiation. He left behind a wife and a large family in New Jersey and Peru.

"Janio's wife has had a difficult time," Salinas' brother John told Univision.

"It is not easy for the poor woman," added Salinas' sister-in-law, Elienda Barbarán. "Replaying the moment is difficult. But we have so many questions: What happened? Why didn't the company consider safety? Why wasn't there someone who checked that the company was functioning well?"

OSHA fined CSC $25,855 following the accident. But after the plant installed a safety guard and started using a new procedure to break up sugar clumps, the agency reduced the fine to $18,098.

Salinas' family told Univision they believe OSHA should have done more.

But, Jean Kulp, director of OSHA's Allentown, Pa., office, told Univision that her agency doesn't have the ability to shut down businesses and has limited criminal enforcement provisions.

In CSC's case, even though it removed a safety device and had received previous warnings to train its temp workers, OSHA didn't find the company "willfully in violation," which would have triggered bigger fines, she said. Kulp said the violations that were found didn't show "total disregard" for OSHA standards.

Congressional efforts to provide more protections for workers have repeatedly stalled. The Protecting America's Workers Act, which would raise fines and criminal penalties for OSHA violations, has been proposed in every Congress since 2004 but has received little attention since a House subcommittee hearing in 2010.



We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)