CID meet mulls on devising mechanism to tackle MLM, MCS cases

In the last few years, scores of companies indulging in MLM and MCS have mushroomed under the cover of land development, sale of health products, e-magazines, consumer durables and even 'watching and grading' of advertisements

Hyderabad: A staggering sum of Rs1 lakh crore is supposedly in transaction in the guise of multi-level marketing (MLM) and money circulation schemes (MCS) across the country, posing a major challenge to the Crime Investigation Departments (CIDs) of various states dealing with white-collar offences, reports PTI.

In the last few years, scores of companies indulging in MLM and MCS have mushroomed under the cover of land development, sale of health products, e-magazines, consumer durables and even 'watching and grading' of advertisements.

It is estimated that more than 10 million gullible people are affected by MLM and MCS in the country and these businesses have inter-state ramifications, according to Additional Director General of Andhra Pradesh's CID SV Ramana Murthy.

The issue was discussed at length at the two-day conference of the chiefs of CIDs of southern state in Hyderabad last week, wherein it was agreed to devise a mechanism to deal effectively with MLM and MCS cases. The states have also agreed to make suitable amendments to the laws to deal with these white-collar crimes.

The issue of "vanishing companies", as complained by the Registrar of Companies (RoC), was also discussed.

"Tackling such fly-by night operators has been a major problem for the Ministry of Corporate Affairs, the Securities and Exchange Board of India (SEBI) as well as the police.

Across the country, directors/promoters of many companies which never undertook any economic activity were able to make good money by cheating the investors through manipulative tactics by floating Initial Public Offers (IPO), collecting crores of rupees and misappropriating the same. It was decided to initiate action against promoters and directors of such companies under the Indian Penal Code (IPC)," Murthy said.

In AP, the RoC reported 18 cases of vanishing companies with the total misappropriated amount running to Rs74 crore. While seven of the cases were under investigation by the CID, one was pending trial. The Hyderabad city police was dealing with nine cases and the Cyberabad police was probing one.

"We have decided to evolve a mechanism for dealing with all such cases so that the culprits are brought to book at the earliest," the CID ADG said.

The other major issue that came up for discussion at the CID chiefs' conference was the counterfeiting of Indian currency that has become "a serious threat to national security from within and outside the country."

"Counterfeit currency in India has become a menace and national concern posing threat to currency management and economic strength. High quality fake currency is manufactured in India by various organizations/agencies and circulated across the country with an aim to destabilize the financial system and cripple the economy," Murthy observed.

It was decided to network with the member states and working out the Source, Transit and Distribution of fake currency.

Many of the accused arrested by the AP Police in West Godavari, East Godavari, Kurnool, Prakasam districts and Hyderabad, Vijayawada and Visakhapatnam cities belong to Malda and Musheerabad districts of West Bengal, according to the ADG.



Vikas Gupta

4 years ago

It is high time that these MLM Companies must be completely banned & Their Promoters should be booked to law. I think that North Indian States are not taking any actions against these Nexus particularly. MLMs are also in the field of Forex like Instant Forex.

Parliamentary panel for making Model Code of Conduct part of RP Act

The Parliamentary Standing Committee on Law and Justice said the Model Code of Conduct is a voluntary agreement among the parties for regulating the conduct of political parties and its members during elections and should be made part of the RP Act

New Delhi: Noting that the legal status of the Model Code of Conduct is a "grey area", a Parliamentary panel on Monday recommended making it a part of the Representation of People Act (RP Act), reports PTI.

The recommendation comes months after an internal note of the Group of Ministers (GoM) on Corruption asked the Law Ministry to look into aspects where "executive instructions" of the Election Commission were required to be given statutory shape, stirring a political controversy.

The Parliamentary Standing Committee on Law and Justice, in its latest report on Demands for Grants of the Law Ministry, said the Model Code of Conduct is a voluntary agreement among the parties for regulating the conduct of political parties and its members during elections to assemblies and Parliament.

"Its legal status, is a grey area...the committee feels that the Code, which was voluntary in nature at one time has not remained so after insertion of para 16 A in the Election Symbols (Reservation and Allotment) Order, 1968, which authorises the Election Commission to suspend or withdraw the recognition of political parties in case of violation of Code of Conduct. Besides, some paras in the code attract penal provisions in other laws," the report said.

The report said that the power of cancellation of registration of a political party is "substantive in nature", therefore, it should not be regulated or provided for under an "order" of the Commission.

"It should either be a part of the Representation of People Act, 1951 or the rules framed there under," panel recommended.

It also suggested that the scope of Article 324 also needs to be examined as "many of the aspects which should have been covered under the rules framed under RP Act are presently covered under instructions issued under Article 324 of the Constitution by the Commission."

In February this year, a Department of Personnel and Training note for the GoM had suggested that the Legislative Department (of the Law Ministry) may look into the aspects where "executive instructions" of the EC were required to be given statutory shape.

It noted that Finance Minister Pranab Mukherjee, who also heads the GoM, was of the view that Model Code of Conduct was one of the biggest excuses to stall the development projects, and thus agreed with the request of the Law Minister to flag the issue and its inclusion in the agenda papers.


Gains on Sensex, Nifty may continue: Monday Closing Report

If the Nifty can hold itself above 4,789, it may rise to the level of 5,040

The market, which was in the positive for a major part of the day, pared all its gains to end flat on a steep fall in the rupee. On the lowest volume of 49.27 crore shares on the National Stock Exchange (NSE) in the past 25 trading days (including today), the Nifty made higher high, higher low and ended in the positive. For the gains to continue, the index has to hold itself above 4789, which may take the benchmark to the level of 5,040.

The market opened on a mixed note on concerns about the eroding value of the rupee and European fears. The Nifty started trade down two points at 4,889 and the Sensex resumed trade at 16,188, up 35 points over its Friday's close. The opening figure on the Nifty was its intraday low while the Sensex fell to its lows in the dying minutes of trade with the index touching 16,150.

Meanwhile, the rupee on Monday fell marginally by 5 paise to 54.47 against the US dollar in early trade due to increased demand for the greenback from importers. The rupee had ended higher by 5 paise at 54.42 against the dollar in the previous session after touching 54.91, its fresh all-time low as fund outflows continued amid Eurozone worries.

Buying support from heavyweights like State Bank of India, Maruti Suzuki, Tata Power and Larsen & Toubro pushed the indices higher in early trade.

The rupee dropped by 30 paise to 54.72 against the US dollar late in morning trade, due to on fresh demand for the US dollars from banks and importers despite a weak global trend. The local unit resumed lower at 54.45 a dollar and dropped further to 54.72 per dollar at 1100 hours.

However, the market pared some gains in subsequent trade and was seen moving range-bound till the noon session. An early recovery by the key European markets from their opening lows resulted in the domestic market moving higher in post-noon trade.

The benchmarks hit their mid-session highs just before 2.00 pm with the Nifty touching 4,938 and the Sensex rising to 16,298. The indices pared all their gains in the last half hour as the weakening rupee weighed on the sentiments and ended flat. The Nifty closed 15 points up at 4,906 and the Sensex gained 31 points at 16,183.

The advance-decline ratio on the NSE was 1043:579.

The broader indices outperformed the Sensex today. The BSE Mid-cap index rose 0.41% and the BSE Small-cap index gained 0.99%.

The top sectoral indices were BSE Capital Goods (up 1.96%); BSE Realty (up 1.90%); BSE Power (up 1.27%); BSE Bankex (up 1.08%) and BSE PSU (up 0.64%). The laggards were BSE IT (down 1.19%); BSE Fast Moving Consumer Goods (down1.17%) and BSE TECk (down 1%).

Tata Power (up 4.49%); State Bank of India (up 3.37%); Maruti Suzuki (up 2.99%); BHEL (up 2.51%) and Coal India (up 2.41%) were the top five gainers on the Sensex. The losers were led by Wipro (down 2.21%); Infosys (down 1.71%); ITC (down 1.65%); Sterlite Industries (down1.19%) and Cipla (down 1%).

The Nifty toppers were Tata Power (up4.73%); Bank of Baroda (up 3.92%); Reliance Infrastructure (up 3.37%); SBI (up 3.27%) and BHEL (up 3.14%). The key losers were Wipro (down 2.62%); ITC (down 2.17%); Infosys (down 2.09%); Hindustan Unilever (down 1.50%) and Sterlite Ind (down 1.39%).

Markets in Asia, with the exception of the Hang Seng and the Jakarta Composite, closed in the positive on bargain hunting after the recent lows made stocks cheaper. However, fears still persist despite world leaders urging Greece to remain in the Eurozone.

The Shanghai Composite rose 0.16%; the KLSE Composite gained 0.42%; the Nikkei 225 advanced 0.26%; the Straits Times gained 0.40%; the KOPSI Composite surged 0.94% and the Taiwan Weighted settled 0.57% higher. Bucking the trend, the Hang Seng fell by 0.16% and the Jakarta Composite tanked 1.01%.

At the time of writing, the French CAC 40 and the German DAX were in the positive while the British FTSE was in the negative. At the same time the US stock futures were in the positive.

Back home, foreign institutional investors were net sellers of shares aggregating Rs248.93 crore on Friday while domestic institutional investors were net buyers of equities totalling Rs148.94 crore.

Essar Oil today said it has signed an agreement with engineering and construction company Larsen & Toubro (L&T) for supply of high quality bitumen. As per the agreement, Essar Oil would supply high quality bitumen from its Vadinar oil refinery in Gujarat to roads L&T is building in the state. Essar Oil gained 0.60% to close at Rs50.55 on the NSE.

Godrej Consumer Products has set an ambitious target of growing 10 times over the next 10 years from its current turnover of over Rs4,850 crore through acquisitions as well as normal expansion in both domestic and international markets. The stock declined 0.78% to close at Rs550.50 on the NSE.


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