[8] The central government through the Income Tax Department and Enforcement Directorate launched a multi-agency probe to investigate the Saradha scam and similar Ponzi schemes.

[24][25] Despite a history of Ponzi schemes, the continuing decline in interest rates, rapid financialisation of household savings, lack of financial literacy and investor awareness, political patronage, absence of adequate legal deterrence, and regulatory arbitrage encouraged the growth of similar companies.

As of 2013[update], 80% of multi-level marketing and finance schemes against which complaints have been received are based in West Bengal, giving the state the title of "Ponzi capital of India".

In West Bengal, Jharkhand, Assam and Chhattisgarh, it began operating variations of collective investment schemes (CIS) involving tourism packages, forward travel and hotel booking timeshare credit transfer, real estate, infrastructure finance, and motorcycle manufacturing.

[56] With enormous funds at its disposal, Saradha invested in high visibility sectors, such as the Bengali film industry,[57] where it recruited actress and Trinamool Congress (TMC) Member of Parliament (MP) Satabdi Roy as its brand ambassador.

Global Automobiles immediately stopped most production but kept 150 workers on its payroll who "pretended to work whenever truckloads and busloads of prospective depositors of Saradha Realty visited the plant for a first-hand check before investing".

[71] It also bought similar shell companies like West Bengal Awadhoot Agro Private Ltd, located in North 24-Parganas, and Landmark Cement in Bankura to showcase them to agents and depositors and convince them that the Saradha Group had diversified interests.

[76][77] Allegedly several political leaders received financial support from Saradha Group, including MPs of TMC, the incumbent ruling party of West Bengal.

[88][89] The earliest public warnings about the reckless and fraudulent CIS in West Bengal started in 2009 from MPs Somendra Nath Mitra and Abu Hasem Khan Choudhury and TMC leader Sadhan Pande.

On 7 December 2012, Reserve Bank of India (RBI) governor Duvvuri Subbarao said the West Bengal government should initiate suo motu action against companies that were indulging in financial malpractice.

[93] He also stated that TMC leader Kunal Ghosh had forced him to enter into loss-making media ventures and blackmailed him into selling one of his television channels at below market price.

[29][102] On the same day, SEBI stated that both chain marketing and forward contracts are forms of CIS, and officially asked Saradha Group to immediately desist from raising any further capital and return all deposits within three months.

[50][103] On 22 April 2013 the Mamata Banerjee led West Bengal government announced that a four-member judicial inquiry commission headed by Shyamal Kumar Sen, retired Chief Justice of the Allahabad High Court, would probe the scam.

[104] On 24 April 2013, Banerjee announced a controversial ₹500 crore (US$58 million) relief fund for the low income depositors of the Saradha Group, introducing a 10% additional tax on tobacco products to raise the money and in jest asked smokers "to light up a little more".

[115] On 12 December 2013, the West Bengal Legislative Assembly passed an amended version of the original Bill, incorporating changes suggested by the financial services, and revenue and economic affairs departments in New Delhi.

[123] In March 2013, Central corporate affairs minister Sachin Pilot said in the Lok Sabha—the lower house of the Parliament of India—that his ministry has received complaints against West Bengal's Saradha Group and many other companies for their involvement in Ponzi or multi-layer-marketing schemes.

[131] On 7 May 2013, the Central Government set up an inter-ministerial group with members of the corporate affairs ministry, SEBI, Reserve Bank of India and officers from the Income Tax Department.

[140] More political controversy occurred when Narendra Modi, the prime ministerial candidate, said Mamata Bannerjee may have directly benefited from the Ponzi scheme when her paintings were allegedly bought for ₹1.8 crore (US$210,000) by the Saradha Group.

[142][143] On 11 September 2014, West Bengal law minister Chandrima Bhattacharya led around 100 TMC women supporters in a sit-in protest against CBI, alleging a biased and "politically motivated probe".

[154][155] Jamaat-e-Islami used its brokerage from the laundering operation to fuel its militant protests against the war crime trials of its founders[156] and destabilise the Awami League government in Bangladesh.

This affected the overall macroeconomic situation of the state; instead of being used by government for public funding, the money went into Ponzi schemes that were either diverted to foreign locations or were put to use for private gains.

[173] It was feared that legitimate non-banking financial companies and micro finance institutions would be stigmatised, leading to a vicious cycle of low depositor trust, higher interest rates, lower lending and a localised credit crisis.

[184] Ghosh was arrested by SIT in November 2013 after he posted a list of 12 names on his Facebook page; these included at least four TMC MPs and West Bengal Chief Minister Mamata Banerjee.

[187][188][189] Since 2 May 2013, after complaints from depositors, state government ordered SIT to broaden its investigation and conduct search and seizure at offices of MPS Greenery Developers Ltd and Prayag Infotech Hi-Rise Ltd, which were running unregistered collective investment schemes similar to Saradha Group.

[193] According to news-reports, at the time of handing the Saradha Group investigation to CBI, SIT had arrested 11 people, had traced 224 immovable properties, seized 54 vehicles and had filed charge sheet in almost 300 pending cases.

[203][204][205] In May 2014, the Supreme Court transferred all investigations into 44 deposit-mobilising companies—including Saradha Group—suspected of running Ponzi schemes in the states of West Bengal, Odisha, Assam, Jharkhand and Tripura, to CBI.

[206][207] As per Supreme Court's order Bengal SIT handed over all arrested suspects including Sudipto Sen, Debjani Mukherjee and Kunal Ghosh over to CBI.

[213] On 12 December 2014, CBI arrested West Bengal Transport minister Madan Mitra on the charges of criminal conspiracy, cheating, misappropriation and deriving undue financial benefits from the Saradha Group.

[citation needed] In March 2019, the CBI filed a plea in Supreme court against telecom operators Vodafone and Airtel alleging their non cooperation in the scam investigation probe.

Sen, in his letter dated 1 December 2020, named Suvendu Adhikari, Mukul Roy, Adhir Ranjan Chowdhury, Sujan Chakraborty and Biman Bose as beneficiaries from the Saradha group.