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Noose tightens around ponzi scheme operators

By Shrimi Choudhary
May 09, 2019 09:10 IST
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The move is aimed at protecting investors from parking their money in dubious schemes.
Shrimi Choudhary reports.
Illustration: Uttam Ghosh/

If you have invested in any deposit scheme, including a ponzi one, and the company is not paying you back in the stipulated time, you can lodge a complaint with the ministry of corporate affairs (MCA).

The Investor Education and Protection Fund (IEPF) Authority under the MCA is coming up with a portal in the next ten days with the sole purpose of getting information about investor grievances and the firms that dupe gullible investors.

The move is aimed at protecting investors from parking their money in dubious schemes.


"Our focus is on people who make small investments in chit fund, deposit schemes and so on, and then lose money. Since the amount is small, they do not complain," says Anurag Agarwal, joint secretary, MCA and CEO, IEPF.

"In that case, the investor could take a picture of the receipt of the money invested and upload it on the portal. The complaint would come to us and accordingly we would initiate action against the company," Agarwal adds.

About 60 per cent of the money in these schemes comes from small investors who never come forward to claim the money.

They usually put money in such schemes in the range of Rs 500 to Rs 1,000.

Having the data of such companies would help the government recognise the demographic of such investors, and keep a check on the companies that promise higher return and disappear, leaving the larger public in the lurch.

The MCA also wants to have a complete ban on cryptocurrencies.

The aim is to protect investors from a virtual world that has no regulatory back-up.

"All the agencies, including the Central Board of Direct Taxes, have suggested a ban on the instrument. The government needs to take a stand. Not taking a decision would also create a problem," says Agarwal

The MCA also raised concerns over the auditor's role in the Infrastructure Leasing & Financial Services crisis.

"We saw what happened in the IL&FS matter... the company is in deep trouble. Strangely, some company gets a triple A rating and after six months there is nothing left with the company," Agarwal notes.

He also points out that the books of the IL&FS group showed it had started defaulting on loans worth Rs 94,000 crore late last year.

"The financial world has become very complex and there are many things which we are not able to detect on time," he says, adding that an increase in the usage of technology would "help us trace such activities".

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Shrimi Choudhary
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