SEBI to take strict actions on Ponzi schemes

April 22, 2015 11:24
SEBI to take strict actions on Ponzi schemes

SEBI has transferred its 20 senior officers from Mumbai to Kolkata in a bid to investigate the illegal collective investment schemes more effectively in the State. West Bengal is known as a major hub of money pooling activities, which is banned by SEBI. In the last four months, SEBI has passed orders against 92 companies that have raised about Rs 2,012 crore by the issue of securities such as debentures and preference shares without complying with the regulatory norms. Of the 92 companies against which action is taken, 40 are based in West Bengal and these companies raised about Rs 500 crore. The total money raised by companies are through the Collective Investment Schemes and unauthorised deemed public issues can be much higher, as the market regulator is now relying mostly on self disclosures by the companies. A large number of these schemes are under the pretext of real estate business.

Kolkata-based All India Small Depositors’ Association has filed cases against 114 tainted firms for raising money through ponzi schemes. SEBI has banned Kolkata-headquartered ICore E Services from raising funds through issuance of securities and restricted the company and its directors from tapping the capital markets. People are being lured by promising attractive returns and then after collecting huge amounts from the public these companies disappear into thin air.

The government has already formed a committee with representation from both the regulators and the Ministry. The panel is headed by Ajay Tyagi, Additional Secretary of Finance Ministry. Ramesh Abhishek, Chairman, Forward Markets Commission addressed senior SEBI officials on the nitty-gritty of regulating the commodities market. Finance Minister Arun Jaitley had proposed to merge FMC with SEBI in the Budget for more effective regulation of the commodity market. As part of the process to merge FMC, SEBI has formed a commodity cell with senior officers to coordinate and facilitate smooth transition. The commodity cell may include Shashikumar V, General Manager and BJ Dilip, Deputy General Manager. This will be a right step in cracking down ponzi schemes which have duped scores of people with false promises.

By Premji

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