Beware Investor from MLM and fraud companies
I have said many times in past that keep away from MLM ( Multilevel
Marketing Companies) or Ponzi Schemes and those companies agent who promise huge
return in short period. Today, I have read Indian express newspaper and sharing
some fact and figure with you about these companies.
The government yesterday said it
has found 87 companies across the country to have disappeared after raising
funds totalling Rs 342 crore through public issues. In these companies most of
established in Gujrat state. Besides, 87 other companies are also being probed
by the government agencies for duping the general public through illegal
Multi-Level Marketing (MLM) or Ponzi schemes and West Bengal tops this list
with as many as 73 such entities.
The market regulator Sebi has also detected as many as 669 companies to
have duped the investors of Rs 7,435 crore through illegal collective
investment schemes, Corporate Affairs Minister Mr Sachin Pilot informed the Lok
Sabha.
The entities are classified as 'vanishing companies' if they cease to
file their balance sheets and other documents after raising capital and the
whereabouts of their offices or directors become untraceable.
In the Ponzi or MLM investments, the companies generally raise the money
from general public and ask each investor to lure others into these schemes
with a promise of huge returns. However, the operators disappear after some
time, leaving the gullible investors in lurch.
In reply to another query on vanishing companies, the Corporate Minister
said that the government had initially identified 238 such entities that have
raised money through public issues. Out of these, 119 companies were put under
a 'watch list', as they began filing their balance sheets and other documents
with the Registrar of Companies or stock exchanges. Out of the remaining 119
companies, 32 companies are presently under liquidation, while 87 others have
been classified as 'vanishing companies', Pilot said.
As per the state-wise list, 26 companies out of the total 87 such
untraceable firms were registered in Gujarat. Gujarat is followed by Andhra
Pradesh (13), Tamil Nadu (10), Maharashtra (9), Delhi (5), West Bengal (5),
Madhya Pradesh (5), and Uttar Pradesh (4) for such companies. Regions such as
Chandigarh, Karnataka have two such firms each, while one company each are from
Orissa and Punjab. FIR has been filed against all the 87 companies and
prosecutions has been filed against 85 of them.
The state-wise list of the companies indulging illegal Ponzi schemes is
topped by West Bengal (73), followed by Delhi and Tamil Nadu with five each
such companies. Besides, two such companies were found in Rajasthan and one
each in Karnataka and Uttar Pradesh.
"Out of these companies, 75 have been wound up and the money
refunded to the investors. 552 companies were prosecuted (and) convictions have
been secured in 124 cases," Pilot said.
The Minister further said that various regulatory agencies are also
taking steps to sensitise the public against such schemes, while newspaper
editors are also sensitised to exercise caution in accepting advertisements
pertaining to acceptance of deposits of un-incorporated bodies.
While Sebi is also conducting various investor awareness programs in this
regard, the RBI is in process of undertaking a comprehensive campaign aimed at
alerting the public against falling prey to Ponzi schemes and other monetary
malpractices.
If you have some queries about investment and financial plan please feel
free to ask.
Regards,
Arvind Trivedi
Certified Financial Planner
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