MLM / Chain Money
MLM operators to face penalties worth three-times of profits

Operators of illegal money-pooling or MLM schemes will soon face penalties of up to three times the profit made by them as against the current provision of a fine of Rs1 crore

Market regulator Securities and Exchange Board of India (SEBI) has decided to increase the monetary penalty for those running unauthorised collective investment schemes (CIS), as the existing mechanism has not proved to be sufficient to deter such illegal mobilisation of money.


Operators of illegal money-pooling or multi-level marketing (MLM) schemes will soon face penalties of up to three times the profit made by them, as against the current provision of a meagre fine of Rs1 crore


A proposal to this effect has been approved by SEBI and the same would be notified soon, a senior official told PTI.


As per a SEBI memorandum in this regard, illegal mobilisation of funds within the existing legal framework falls within a provision wherein a maximum penalty of Rs1 crore may be imposed.


SEBI is of the view that this penalty “is very meagre compared to the money mobilised by unregistered CIS, especially considering that in certain cases the money mobilised is in multiples of thousand crore.


“Hence, adjudication under the existing mechanism may not be sufficient to deter such illegal mobilisation of money.”


Accordingly, SEBI has decided to amend the relevant regulations to provide for “a penalty of Rs25 crore or three times the amount of profits made, whichever is higher”.


To tackle the growing menace of investors being duped of their hard-earned money through various illegal investment pools, many of which are in the nature of ‘ponzi’ schemes, SEBI has been given the mandate to take action against all such money collection activities involving Rs100 crore and more.


A typical ‘ponzi’ scheme involves the operator collecting a large amount of money from investors and paying them returns from their own money or the money collected from subsequent investors, rather than from profit earned by the person or entity operating such a scheme.


Such activities came to be known as ‘ponzi’ schemes after Charles Ponzi, who became notorious in the US in 1920s for deploying this technique while promising 50% return on investments in 45 days and 100% within 90 days.


A large number of such schemes have come to the fore in India as well, while many of them have faced regulatory actions by SEBI in recent months.


However, SEBI in most of the cases has only asked the operators of such schemes to refund the money to investors and stop such unauthorised activities. The schemes that have faced action include those promising huge returns based on investments on potatoes, goat rearing, cattle and butter schemes, Emu farming, real estate and holiday memberships.


Tightening the noose on perpetrators of such investment pools, SEBI in its board meeting earlier this month decided that all unauthorised CIS activities be declared as ‘fraudulent and unfair trade practices’ and dealt with accordingly



vineeth kumar

4 years ago

100% the management & people designing the product or service smartly utilizing the loop holes in Indian rules n regulations must be brought to book, but, I am not at all happy to see the SEBI penalty of 25 Cr or 3/5 times of looted profits (or swindled cash).
Anybody who understands the power of two/geometric progression or complete misuse and manipulation of power of compounding can calculate & see for themselves that this PENALTY is as STUPID as the Govt. Planners of Jurassic rules and regulation which needed amendments way back in 90's when these frauds like Amway/RMP/Herbalife/ many names that we can’t remember, were allowed to set up shop.
Where were the IO/MCA/RBI/SEBI and all those Public SERVANTS who are living on our sweat and blood, given the job to protect the MASTERS? Without the active support of corrupt public servants/ politicians lobby; unbiased complete background check would have eliminated & none of these elements would think of fraud. We are not fools not to understand that MCA/ROC/Excise/Vigilance etc are hand in glove with such companies.
How can MCA/ROC/ISO/RBI...ETC allow any criminal like Dr. Harish Madaneni, presently languishing in Trichur Jail for "nano excel" fraud? What were the LDF or UDF or BJP doing when a gang of people ABUSED THE NAME SOLAR. Really sad that these two cases has given bad publicity for state of the art, cutting edge tech. Of 21st century and beyond
My humble request kindly appoint a fast track court, TAT for Trial Justice and freeze the assets of all responsible Babu's, politicians & benami's. Arrest them and PUNISH them for life in jail without any parole or mercy.
What about those people Independent Distributors who call themselves leaders, there are so many of them, who became Millionaires by implementing the fraud marketing plan – heavily tilted to increase their size of wallet, so many people are victims, of the greed of the so called leaders, their life and family life gone mess. Why are the Public Servants/Judiciary afraid to attach their ill gotten massive property EARNED by feeding on the blood and sweat of Crores of people.
You may be afraid, but, there are many people like me, who have lost TOTAL RESPECT & FEAR of any Laws and stopped trusting any mechanism placed into protect peoples interest...this is a sad reflection of frustration & anger, of what I (we) see happening around.
“Fear the Fearless”.....I am not afraid anymore...what have you done with parasites like Sajeev Nair, some juice company, Abhilash Thomas, Dr. Shamsudheen of RMP (wonder if his Dr. Is on Fraudology) so many names...freeze each one of their earned income from MLM and let them face the MUSIC of TRUE LAW and ROT in jail.
Every Court, so many cases are orphaned 20/25 yrs...INDEFINITE excuse can be entertained even by the Supreme Court of India. Allow me ask Honorable Chief Justice of India, do you still believe that “JUSTICE DELAYED IS JUSTICE DENIED”...If so, are you not Guilty of the massive delays in final verdict...?
Sincerely, many times I have prayed, God let this be my last sleep – don’t want to see tomorrow because each day starts with a depressing note with front page reporting of Rape, SCAMS, me one positive DEVELOPMENTAL NEWS in TOI FRONT PAGE Specially with all others doing their best. Articles in the name of NEWS, Every media run and rerun the same...for their job is to enhance the profitability for the corporate owners.
At this rate, If proactive steps are further delayed ..Beware...time is not too far, if the masters take to the street across India, (or Humankind across the Globe)...NOTHING CAN PREVENT THE 2nd WAVE of REAL FREEDOM–the FREEDOM Dreamt by our beloved freedom fighters...totally got derailed due to the Tsunami of Colored Money....Beware of a UNIFIED HUMANKIND, you will not get an inch to hide or escape...I am positive of change, change for the better. Despite witnessing increase and enhanced ENTROPY (chaos)...this chaos will increase multiple times in future (an I pray that it happens soon). Because, Every Chaos, Leads To a New “WORLD ORDER”...of Collective Cooperation to build and EMPOWER AS MANY Families as possible.
Let’s leave the world slightly better than we found it...
Disclaimer: What ever written are purely my views. Every Rule has EXCEPTIONS. And I can prove with available evidence. I stand for what I said. I am not for SALE.
May Hope Happen...!



In Reply to vineeth kumar 4 years ago

well said sir...what u write is true every bit every bit

Food Security Bill passed. What about food supply security?

Reliance on the existing, very leaky, public distribution system or ration shops for the Food Security Bill will have adverse repercussions. The Bill promises to provide foodgrains at Re1 to Rs3 per kg, while paying farmers Rs12.85 per kg for wheat and Rs12.50 per kg for paddy as MSP. Who will pay the difference between MSP and selling price?

Where there is hunger, law is not regarded; and where law is not regarded, there will be hunger. – Benjamin Franklin


The United Progressive Alliance (UPA) government finally was able to get approval for its ambitious Food Security Bill (FSB) from the Lok Sabha. It will now be considered by the Rajya Sabha (upper house). The FSB, the brainchild of UPA chairperson Sonia Gandhi, aims to give legal rights to 67% of the population (those below the poverty line-BPL) over a uniform quantity of 5 kg foodgrain a month at Re1 to Rs3 per kg. Although, the UPA government aims to provide food security to poor, its implementation is left with the state government, who may or may not be a willing partner in the scheme. Already, there are concerns being raised on this front as well as FSB's possible impact on the country's exchequer.


According to Nomura Financial Advisory and Securities (India) Pvt Ltd, the country's economy can ill-afford the FSB at current juncture. "While the Bill aims to promote inclusive growth and the government hopes to garner political mileage from it (general elections are due by May 2014), we believe that a reliance on the existing, very leaky, public distribution system will have adverse macro repercussions and cause increased imbalances in the agriculture sector," Nomura said in a research note.


Industry body Confederation of Indian Industry (CII) too has raised concerns. In a release, Kris Gopalakrishnan, president, CII, said, "Such a large outlay at this point in time would definitely have a negative impact on the fiscal deficit. This needs to be managed. The larger concern is regarding the effective implementation of such a high profile and critical social agenda of the Government. The use of public distribution system (PDS or ration shops) raises questions about the efficacy of the model. Targeting is another area that would need special attention. CII hopes that appropriate focus would be given to these aspects—mainly that of targeting so that the needy can benefit from this programme."


In a statement, the government said, "Access to highly subsidised food grains to small farmers under proposed Food Security Act and assured minimum support price (MSP) for their produce will ease the burden on their earnings and allow them the option to spend the money so saved on other necessities. Hence, it is expected to help improve their quality of life. Therefore, contrary to dissuading farmers from producing more, the Act will in fact encourage them to produce more."


The FSB aims to provide subsidized rice, wheat and coarse cereals to 67% of the population. However, the consumption pattern across the country varies. In fact, some states like Rajasthan do not sell wheat in its PDS shops. In Jharkhand, the quantity of rice consumed by a rural BPL household is 3.6 times its consumption of wheat. By contrast, in Rajasthan the foodgrain consumption under PDS almost entirely comprises of rice.


As per the Tendulkar Committee estimates around 41% of rural and 25% of urban population fall under the below poverty line or BPL category.


According to the government, the FSB would require 62 million tonnes of food grain every year, and the food subsidy bill would rise to Rs1.3 lakh crore per annum (1.2% of GDP) from Rs80,000 crore currently (0.8% of GDP), or an additional fiscal burden of 0.3-0.4 percentage points every year. The full fiscal impact of the bill will not be felt this year, as half of the current fiscal year is already over and states will take some time to identify the list of beneficiaries.


"However, once the bill is fully implemented (likely from FY15), the total cost is likely to rise substantially for two reasons. First, the food subsidy bill will rise, and second, there will be ancillary expenditures associated with creating the infrastructure to implement this bill. Additionally, we see the bill as inflationary, because it creates a demand-supply mismatch, requires raising minimum support prices to encourage production, could create a shortage of non-grain food items and reduces the marketable surplus for the private sector," Nomura said.


The FSB lays emphasis only on cereals, neglecting other food items and overlooking the issue of nutrition, which should be the end target. In rice and wheat prices, the inflation is just around 1%. What about other items; especially vegetables, fruits and pulses, where there is substantial scarcity?


After failing to pass the FSB through Parliament, the Union Cabinet promulgated this Ordinance a few weeks before the monsoon session was to commence. At that time, Arvind P Datar, a senior advocate of the Madras High Court and the Supreme Court had raised questions over the emergency for bringing out the Ordinance.


“The gargantuan amounts that will be spent on Food Security and other schemes will necessarily reduce the amounts available for improving our infrastructure, education and, equally important, our defence sector. The Food Security Bill may well be the tipping point in our nation’s future and make economic recovery extremely difficult if not impossible. Philanthropy without productivity, welfare without wealth and charity without capital will guarantee the bankruptcy of any nation,” he had said.




4 years ago

There's no free lunch . . . as of now, the food bill stands @Rs.68 per dollar

Vinay Joshi

4 years ago

Mr. Yogesh Sapkale,

‘The measure of superhero is always his nemesis’. David Lyons.

‘The future ain't what it used to be’.

FSB, greatest savior & keeping on backburner DTC/GST/FDI! Investors don't require FSB!

When Indian politics is in a state of flux & post poll possibilities endless, the onslaught of intolerance is now combated by ‘VOTE SECURITY BILL’, called FSB by all the political parties put together [apart from differentiation, vociferous debate COMPULSORILY passing it in LS. Same scenario will be repeated in RS & will be enacted law.] OK!?

As a matter of fact this bill was supposed to be passed on Aug20, Rajiv Gandhi’s birth anniversary, WHY WAS IT STALLED? WHY SAME PASSED ON Aug26! WHO & WHY STALLED IT?

How has Nomura FAS[I]Pvt.Ltd; COME TO A CONCLUSION THAT AT THIS JUNCTURE it is & WILL BE IMPLEMENTED? HAS NOMURA TAKEN into consideration to roll it out & IT’S IMPACT FY14? These people never do it! Their biz of talking!
[not that I’m protagonist of FSB, first ridiculed by me years back, thereafter the moment proposed by NAC.]

Mr.Yogesh, if you’re putting up aspects of ML [that too live aspects in the int’l aspects] you should have waited! [forget Nomura- they can say anything.] IF YOU & ML HAD KNOWN & watched the question hour in parliament that PC would be making a statement. Now, CAN YOU COUNTER PC’s statement on the state of economy on the floor of LS – stating that fiscal will be as per target & all measures implemented for fiscal FY14. – [NOMURA’s OR ‘NOMOREas’, to me JUST LIKE HARSHAD MEHTA’s ‘GROWMORE’, ‘GROWTHMORE’, giving out dot matrix printouts & handouts to one & sundry & panwallas.
[No doubt Nomura is int’l but certain analytics not conducive as advisory. I can’t be subjected to their view.]

So do not be carried by media hype W/O ANALYSING YOURSELF & JUMP INTO BANDWAGON! Ok. This reflects ML perception.

FSB still not implemented, Cong. ruled state – RAJASTHAN as per you – do not sell wheat in PDS? Check it out for yourself & come back. Or why you didn't start WITH that & state?

Yes, later on ‘after all’ you write up & state of ‘fully implemented’, it’s financial implication.


Carbohydrate – whole grain cereals, energizing & oxidation. Min 60/70% of calorie requirement.

Are you aware that India’s cheap food is expensive diet in US/West?

FYI sorghum, pearl millets, finger millets cost US$ 10/kg [envisaged to be given at 1.87/ odd cents.]

The focus will shift there just like onions to be re-imported & FSB in tail spin.

I’m not anti-poor but in the manner in last 40 odd yrs PDS leakages are there, there would be no necessity of FSB! WHY CONG. HAS KEPT THE POOR HUNGRY IN IT’s LAST 10 yrs of being in power OR 57/66 yrs in power? Let’s be apolitical.

If you can talk macroeconomics answer me.


So in the meantime, do not state what Nomura states or Fitch states – STATE WHAT YOU HAVE TO SAY!?


R Balakrishnan

4 years ago

Madame Soniya has hammered the first nail on the coffin of India, just to ensnare another victory in an election. There will be scams and frauds around this. Every few years, food output will fall and grains will be imported, giving an annuity to the corrupt.
This family has single handedly screwed India and Indians. Nehru by creating divide based on caste, creed and language. Now this lady runs riot with taxpayer money.
Is there any light at the end of the abyss??


Vinayak Bhimarao Mudholkar

In Reply to R Balakrishnan 4 years ago

Is NaMo the right alternative for economic progress of India?

If Robert Vadra is a small farmer...

Haryana chief minister, BS Hooda has claimed Robert Vadra, the son-in-law of Congress president Sonia Gandhi is a small farmer from the state. Here are some reactions in twitter to Mr Hooda’s comment

Following the uproar over IAS officer Ashok Khemka’s 100-page submission to Haryana government on the Robert Vadra-DLF deal, the state chief minister has given a clean chit to the son-in-law of Congress president Sonia Gandhi. In an interview to The Hindu, Bhupinder Singh Hooda, chief minister of Haryana has said, "He (Vadra) is a landowner. If he owns land designated as an agricultural zone, then he is a farmer. This uproar (over 3.53 acres) is only because he is the son-in-law of the Congress president. Thirty-five to 40 per cent of our licences are given to such small farmers who enter into collaboration agreements with developers. It is not illegal."


However, the social media is abuzz with this clean chit given by the Haryana chief minister to Mr Vadra over the land transactions.


Here are some interesting tweets...


@SujnanNayak #IfRobertVadraIsASmallFarmer then Mukesh Ambani is small time grocery shop owner & Anil a mobile repairer.


@rsyashasvi #IfRobertVadraIsASmallFarmer hope he stands in the ration shop queue to get 25 KG free grains now that #FoodSecurityBill bill is passed!


@sonalchainani #IfRobertVadraIsASmallFarmer then Gurgaon should be renamed as JAMAICA... because half of the Gurgaon land is actually JAMAI KA!


@sharmarohitraj #IfRobertVadraIsASmallFarmer Then he probably grows 20 feet potato in his fields.


@Prakash_Sharma #IfRobertVadraIsASmallFarmer then Dawood Ibrahim is a small time pick pocket!


@gajender00 #IfRobertVadraIsASmallFarmer we can proudly say to the world,Look here guys we give Z security to even a small farmer &  #FoodForAll


@bharatmodi_ #IfRobertVadraIsASmallFarmer then al-Qaeda is an elite peace keeping force


@Alllahdin #IfRobertVadraIsASmallFarmer KRK is NASA's chief, MMS is a Rock Artist,Udai Chopra is 5-times Oscar Winner,n Twitter is fr losers..Ohh Wait.


@KartikDayanand #IfRobertVadraIsASmallFarmer and so is Amitabh Bachchan, remember? And yes, Sachin Tendulkar is an actor and I am your next Prime Minister!


@PrateekShah #IfRobertVadraIsASmallFarmer Arnab Goswami is a great listener, Mayawati is Miss India, Nitin Gadkari runs faster than Milkha Singh


@indiantweeter IfRobertVadraIsASmallFarmer Barack Obama is president of Somalia


@fakingnews #IfRobertVadraIsASmallFarmer Amitabh Bachchan is a struggling actor.



Ashok Sen

4 years ago

any self respecting President of a party would ask his/her chief minister to resign,after this small time farmer comment, but then it refers to jamai ca,so her hands are tied, and in the process, india represents a fourth world country


4 years ago

i hope people on twitter transalte these into votes during the election

Veeresh Malik

4 years ago

From Jai Jawan Jai Kisan to "Jai Jamai Jai Kamai". We've come a long way!!



In Reply to Veeresh Malik 4 years ago


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