India Considering Single Agency To Lead Ponzi Investigations
An Indian inter-ministerial group evolving a legal framework to protect investors against frauds by ponzi operators is now working on how a single agency can take lead in investigating cases most of which are spread across states.
Central agencies like CBI are capable of taking up inter-state investigations. But they can only be handed over cases either on the request of the state governments or orders of a court.
Keeping this in mind, the inter-ministerial panel is now learnt to be focusing on how ponzi-related cases be handed over to an agency without waiting for court order or state government's recommendation.
Various options are being considered, said sources in know of the development.
The committee is mandated to work out a new set of Standard Operating Procedures (SOP) to be followed by the government for central and state law enforcement agencies for probing ponzi schemes.
A ponzi scheme is a swindle in which quick return on an investment is offered. Major such scams being probed by CBI, Income Tax and other investigating agencies include those relating to Rose Valley and Saradha chit fund wherein investors lost about Rs 15,000 crore and Rs 2,500 crore respectively on false promise of good returns.
The panel has been set up to ensure proper enforcement of regulatory framework for multi-level marketing companies, non-banking finance companies, and companies running collective investment schemes.
Many entities have registered themselves as chit funds but are found to be raising money illegally through fraudulent schemes or ponzi schemes by promising high returns.