How a fake rose plantation scheme became one of India's largest financial frauds

Cultures · Published 10 October 2026 Swipe more like this →

In short: Starting as a modest insurance-linked venture in 1997, the Rose Valley Group evolved into a massive Ponzi scheme that siphoned over ₹15,000 crore from millions of depositors. By masking illegal deposits as real estate and holiday memberships, the conglomerate infiltrated politics and cinema before its eventual, devastating collapse.

Founded by former insurance salesman Kajal Kundu, the Rose Valley Group initially promised dividends from rose plantations. When the Securities and Exchange Board of India (SEBI) denied the company approval in 1999, it simply continued operations without registration. Following Kajal Kundu's death in 2003, his brother Gautam Kundu took control, aggressively expanding the firm's reach across eastern India. The group enticed low-income investors with interest rates as high as 17.65%, far exceeding standard bank offerings, while using a web of shell companies to obscure the flow of funds.

The scale of the deception was staggering. By 2015, investigators estimated the total fraud exceeded ₹15,400 crore, with the group maintaining over 3,000 bank accounts across 12 states. Gautam Kundu funneled these illicit deposits into high-profile ventures, including luxury hotels, media networks, and the Bengali film industry. At its peak, the group reportedly controlled roughly 30% of Tollywood's investments. This influx of capital distorted the local economy, inflating film budgets and creating a reliance on fraudulent funds that left thousands of technicians vulnerable when the scheme finally imploded.

The scandal's political fallout was equally profound, ensnaring high-ranking officials and celebrities who were accused of promoting the schemes or receiving financial benefits. Despite repeated regulatory warnings and prohibitory orders starting in 2011, the group exploited legal delays to survive until 2015. In recent years, the Enforcement Directorate (ED) has focused on restitution, auctioning seized assets to compensate victims. By October 2024, the government had distributed ₹515 crore to approximately 7.5 lakh claimants, a fraction of the millions affected by one of the most complex financial crimes in Indian history.

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