The government's corporate fraud investigation wing is currently probing 185 suspected illicit deposit schemes that raised thousands of crores from gullible investors. Of these, 135 schemes were run of West Bengal.
CNBC-TV18‘s Siddharth Zarabi reports that the multi-level marketing companies will be banned by the government. The proposal has been mooted by the department of financial services and is likely to be fast tracked considering the seriousness of the chit fund scam
A government panel has suggested running a public campaign under the flagship consumer awareness programme 'Jago Grahak Jago' to guard the gullible investors against multi-level marketing (MLM) and pyramid structure companies collecting money through ponzi schemes.
The collective investment scheme regulations of 1999 are too old to handle the new and innovative schemes that are being introduced. With more scams in this area coming to light SEBI's call for a principal regulator to oversee all collective investment schemes including multi-level marketing schemes has gained strength.
The Securities and Exchange Board of India (Sebi) has sought re-examination of the norms of collective investment schemes to specify its scope. Current norms do not include art funds, time shares and multi-level marketing (MLM) companies.
Multi-level Marketing (MLM) companies may soon find it difficult to survive. The government will finalise exclusive regulations for MLM companies after its probe, reports CNBC-TV18.