Govt to issue advisories against Ponzi schemes to states, police

New Delhi: Continuing its efforts to curbfraudulent investment schemes, government will soon start aprocess to sensitise police, judiciary and other agenciesacross states on ways to contain this menace.

The project is being undertaken by the Corporate AffairsMinistry with an aim to reach out to the authorities presentat the last mile to make them aware about the steps they cantake against individuals and entities defrauding the gullibleinvestors in the name of high return schemes.

Aiming to make it a nationwide initiative, CorporateAffairs Minister Sachin Pilot said he himself, as also otherrepresentatives from his Ministry and other central agencies,would hold meetings with judicial and police officers indifferent states.“Authorities, judicial and police officers would be madeaware about these issues. We are willing to go out of Delhi(to create awareness). Sitting and doing things from Delhi maynot work very well,” Pilot told PTI in an interview here.

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[caption id=“attachment_991833” align=“alignleft” width=“380”]  The Saradha chit fund scam rocked the entire country. Agencies.[/caption]

The minister said that it is the job of the investigatingand prosecuting agencies to take the case further, once thefraud is detected, and therefore it is necessary for them tobe aware about the steps that needs to be taken in such cases.“Once you detect the fraud and catch the culprits, to be able to have the right knowledge of the law under theCompanies Act, how to prepare those charge-sheets, how toactually file and prosecute people, that is the job of theinvestigating agency and the prosecuting agency,” he noted.

The Minister said that police at times might not know thesections of the law under which a case should be registered.Similarly, the Registrar of Chits must know the powersthat they have to check and regulate the chit funds.“They should know about the data and information that they needs to check with other regulators. It is notimpossible given the technology available today. The agenciesjust need to work together,” he said.

“So, I am going to go to East India, West India, statecapitals and meet the state department officers, irrespectiveof who is running the government,” Pilot said.The latest initiative comes against the backdrop ofrising instances of common man getting duped by variousfraudulent investment schemes, including ponzi schemes whereinvestors are promised higher returns for bringing in newpeople to the net.

After Saradha scam broke out in West Bengal earlier thisyear, the Centre had initiated various steps to curb suchactivities and protect the interest of investors.Capital markets regulator Sebi has already been givengreater powers to regulate all kinds of investment poolsinvolving Rs 100 crore or more, while it has also beenauthorised to pass orders for attachment of properties andconduct search and seizure operations.

Pilot said that the Corporate Affairs Ministry would seekto create a greater connectivity with state authorities tobetter tackle the fraudulent investment scheme menace.“Most police departments, whether it is Delhi or otherplaces, they have an Economic Offence Wing. How they must relate to the Ministry of Corporate Affairs and Registrar ofCompanies with regulators should be known. There is a need fora greater connectivity between these agencies,” he added.

The minister also stressed that he along with officials,regulators, state police and judicial officers, among others,would carry out capacity building on laws that are in place totackle ponzi schemes.Stressing that there needs to be more awareness aboutvarious laws and relevant sections to punish the guilty, Pilotsaid that weak cases would allow scamsters to go scot free.

“We find people who have done wrong but then under whichsection of Companies Act, CrPC, IPC… etc. If the case isweak at the beginning, no matter how big the scamster is itwill not hold in the court of law,” he said.“That kind of training and investor education isnecessary. We will do it in the East, West and other parts ofthe country,” he added.

PTI