Stiff rules to fight Ponzis on way
Admin | 24 November, 2014 | 403 | 3980
New Delhi, Nov. 23: The finance ministry will seek cabinet approval for a stringent set of rules against Saradha-type ponzi schemes.
The proposed amendments to the Prize Chits and Money Circulation Schemes (Banning) Act — which may come up before the cabinet as early as this week — has widened market regulator Sebi’s power to cover fraudulent pyramid schemes that have mopped up less than Rs 100 crore from the public. Such schemes are not covered by the current Sebi act.
Besides, the Serious Fraud Investigation Office of the corporate affairs ministry will get overarching powers over state police forces in probing scams.
However, the amendments to the 1978 act — which will be prospective — have not given relief to direct marketing companies.