"It was observed during inspection of the books of account of MMLF with reference to its financial position as on 31 March 2010, that the company has violated extant directions on the deposit acceptance:" RBI
The Reserve Bank of India (RBI) on Monday barred non-banking financial company Money Masters Leasing & Finance (MMLF) from accepting public deposits and selling its assets for six months for violation of directions on deposit acceptance.
“The RBI has prohibited with immediate effect Money Masters Leasing & Finance from accepting public deposits from any person in any form whether by way of fresh deposits or renewal of the deposits or otherwise as well as from selling, transferring, creating charge or mortgage or deal in any manner with its property and assets...” the apex bank said in a statement. The RBI said that the NBFC has been barred from undertaking such operations without prior permission of the RBI for a period of six months.
“It was observed during inspection of the books of account of MMLF with reference to its financial position as on 31 March 2010, that the company has violated extant directions on the deposit acceptance,” the statement said.
Besides, the city-based MMLF has been directed to repay existing deposits as and when they mature. It, however, has been allowed to carry on other business activities in accordance with law. The company, which specialises in hire-purchase and leasing, is also engaged in consumer finance and public vehicle finance. The firm had secured NBFC registration in 1998.
Moneylife has been in the forefront for highlighting frauds committed by MLM and Ponzi schemes. We hope the government brings a strong regulation to curb such schemes, in the interest of the public at large
If 2010 was the year of great Indian scams, 2011 was rather of ponzi and multi level marketing (MLM) frauds. SpeakAsia managed to top the chart, but soon many others joined the bandwagon, duping gullible investors for several thousand crores.
In India, MLM and schemes promising easy high returns are not unusual. Since the start of this year, Speak Asia was new a buzzword. From college students to housewives, everyone was ensnared by it and invested in the scheme on the promise of easy weekly returns, merely on filling online surveys. Though the company paid the promised income in the beginning, there were certain grey areas in its business model. SpeakAsia was registered in Singapore, and was working in India without any office, and was not registered with registrar of companies.
Moneylife was the first media organisation to raise a red flag regarding the business model of Speak Asia (http://www.moneylife.in/article/78/9864.html). Soon its dubious nature was exposed in the mainstream media during its Goa bash that was held in May. Despite ambiguities prevailing in the scheme, the regulators remained tight lipped. Moneylife repeatedly urged the Reserve Bank of India (RBI) to investigate the company’s money trail, since a lot of money was amassed and sent to Singapore. But nothing was done and finally the scheme collapsed, duping 19 lakh gullible investors. Currently the top bosses of SpeakAsia are absconding while other employees are arrested. The Economic Wings (EOW) Department, Mumbai is investigating the scheme. Sources from EOW tell us that already substantial amount of money has reached Singapore.
Stock Guru India, grabbed headline in April after its founder Lokeshwar Dev, duped investors for whooping Rs1,000 crore (http://www.moneylife.in/article/stockguruindia-allegedly-dupes-2-lakh-investors-of-over-rs1000-crore/15461.html). This fraud company, operating as a self-styled investment advisor, openly flouted norms laid down by the market regulator Securities and Exchange Board of India (SEBI) and offered 120% returns in a year through stock market investment. SGI was not registered with SEBI as an investment advisor, but still offered to trade on behalf of clients. It also operated without any trading licence from the RBI and SEBI. Moneylife, much before (in December 2010) the scheme collapsed, had pointed the dubious modus operandi of the scheme (http://www.moneylife.in/article/78/12686.html). Again SEBI ignored and remained silent.
In June 2011, frustrated with the mushrooming MLM schemes, the Kerala police started an investigation into these schemes and closed many of them. The police admitted noticing frauds amounting to over Rs1,000 crore in the state. Following the hue and cry from a number of investors, investigating agencies from Kerala started probing several multi-level marketing (MLM) companies—two prominent names among these were Tycoon Empire International and Bizarre group of companies. It arrested some of the promoters. Many of these cases had inter-state ramifications and were handed over to the crime branch in Kerala. Media reports have quoted Jacob Punnose, director general of police (DGP), Kerala, as saying that these investigations would be completed within five to six months. Chennai-based Tycoon Empire International had collected Rs370 crore from 50,000 investors, while Bizarre group collected Rs55 crore from depositors. Besides these two names, another MLM company cheated people of around Rs300 crore. It operated 14 accounts in a private bank, using false names and addresses. (http://www.moneylife.in/article/kerala-gets-tough-with-money-swindlers-and-mlm-companies/17571.html) MLM company Nano Excel came under the scrutiny of the Karnataka police after it cheated its investors for Rs9 crore.
In November, Jaipur-based multi-level marketing (MLM) company, Gold Sukh, has allegedly duped over 1.75 lakh investors for over Rs200 crore (http://www.moneylife.in/article/another-mlm-company-gold-sukh-dupes-investors-for-rs200-crore/21722.html).The company promised investors 27 times returns in just 15 months on their deposits for buying gold. Police arrested officials of the company and issued a red corner notice through Interpol against the absconding directors of the company.
The chief minister of Rajasthan has asked officials to draft a bill against fraudulent MLM schemes against the backdrop of the on going investigation in the multi-crore Gold Sukh scam.
Even while the EOW Mumbai was investigating SpeakAsia scam, it successfully arrested a fraudster of another MLM company. In October, EOW arrested Rahul Patil, managing director of Symbiosis Gold Trade. Interestingly, when Mr Patil was bought to the local court in Mumbai, some duped investors—mostly women—hurled chappals at him. It promised Rs1.20 lakh profit at the end of year apart from the actual investment of Rs1 lakh.
EOW Mumbai, in November 2011, unearthed another fraud by MLM scheme, Yellow Sapphire Multi-Trade Pvt Ltd, after it cheated around 2,000 investors. According to the company’s scheme, on investing a sum of around Rs6,000, one would get a gold pendant worth the invested amount along with additional Rs840 on introducing two new members to the scheme.
Despite the EOW’s strict action, many schemes continue to flourish. In fact schemes which in past have duped investors have made a come-back. For instance, Gold Quest, which came under the scanner of investigating authorities, is once again trying to spread its reach to the investor. The company, registered in Singapore, has been banned in many countries. It has re-launched itself in India and is said to be successful in attracting new investors from Mumbai. Gold Quest has now renamed as Q-Net or Quest Net, is selling a certain products including watches, holiday packages ranging from anything between Rs30,000 to Rs7 lakh. The company started by selling limited edition numismatic gold coins through a pyramid structure for Rs30,000. It claimed the coins were made in Germany and will appreciate in value, over a year, which will and fetch huge returns to the buyer.
Moneylife Foundation, a not-for profit organisation which spreads financial literacy, had send an memorandum to the Prime Minister’s Office urging the PM and others to completely ban MLM companies in India or bring these companies under the regulation of either RBI or SEBI. (http://foundation.moneylife.in/promotion/speakasia/index.html)
Hope in 2012 the government brings a strong regulation to curb MLM and pyramid schemes, in the interest of the public at large.
Modern India throws out its donkeys and asses. But Modern business in India wants young men to work harder than the patient—rarely complaining and possibly more efficient—donkeys
The other day I saw an ass.
This may come as no surprise to misanthropes and ever-loving cynics who see asses everywhere they go.
Even I, of humble and mild disposition, meet them often.
They are the ones who have opinions about whether having a convivial drink, or for that matter getting bacchanalian at a celebration deserves a public thrashing. They are the ones that think that who you were born to be more important than who you are, and they don’t actually know the difference; these asses will kill you if you cross imaginary boundaries and talk to someone of the opposite sex who is of ‘nobler’ birth. See I told you, they were asses!
Then there are the others who think that their God is better than your God, and if you don’t have a God, then God help you. Asinine as it may be to think that the all-seeing omnipotent omniscient unbelievably creative ‘it’ up there, here and everywhere actually wants to and is pleased by playing favourites, and that too by just one of the million trillion gazillion things on this and countless other planets, these geniuses will kill you and themselves for it, dying I presume with a self satisfied smug smile on their faces as they explode into nothingness.
There are of course asses of others kinds: white ones who don’t like black ones, brown ones who think white ones are the source of all their problems and possibly striped ones who can’t tell who is to blame at all. There are spectacularly intelligent asses who believe that the reason the planet turns is because the light shines from, well, their asses and so they blithely go about doing whatever they feel, as the earth burns in their wake.
So as I said I see asses too.
But this was different. I actually saw one on the street. A full blown four-legged ass in the heart of one of the largest cities in the world in the 21st century! Of course, since I am not a zoologist I couldn’t swear it was an ass. It could have been a donkey. Is there a difference?
Anyway here was this lone ass darting across the street to avoid being run over by my car. Now asses aka donkeys as I knew them many years ago before the human varieties that I referred to earlier replaced them, are somewhat phlegmatic creatures, choosing to at best express themselves with an occasional braying sound. But this one seemed like he (maybe she?) was excited about something.
But what got me thinking was where have all the asses gone? At one stage I remember them laden with bricks meandering to a construction site. Or carrying clothes that the ‘dhobi’ was taking away to the local washing place or bringing them back starched and pressed. Or just hanging around in packs at random corners, much like teenagers apparently waiting for something, anything, to happen. And from time to time above the din, you would hear them—the loud braying that was both irritating and somewhat reassuring.
And they were interesting creatures that seemed to have a stoic, and yet not-boring disposition. I was told as a child never to walk behind one for they could and would kick. The saying “dig your heels in” seemed to be inspired by them: I have seen this washer man struggling to get one of them to move. No dice.
Over the years they slipped from sight, even from memory. Till the other day. And I began to wonder, what had happened to them. I know this is not as romantic a notion as musing about the swallows of Capistrano or some such.
But hey I liked these creatures: They were of service, they mostly didn’t complain and in an anthropomorphic way I thought they were cute especially after I had seen Shrek.
Maybe they disappeared or at least were disappearing because we had little use for these beasts of burden and unlike their fellow B of B’s they didn't have other uses like milk and cheese and even the occasional steak. (I hear that Cleo’s complexion was much enhanced by asses’ milk, but Shahnaz Hussein has not revived this Pharaonic tradition.)
And so with a sigh and a heave of the old chest, I went on with my evening and my life.
Till this morning. Same street corner, different day, and headed in the opposite direction: The car is stuck behind a handcart. Now handcarts are not uncommon in India, and the beast of burden in this case is a fellow human being. Unlike donkeys/asses these beasts have not disappeared or are disappearing. They seem to be a “viable” species in India.
Here was the interesting twist: the handcart was for delivery of domestic cooking gas cylinders. The puller of the cart which was admittedly a modernized version of the traditional wooden one, was a uniformed with company Bharatgas logo and all, young man.
It was the oddest thing of all. Modern India throws out its donkeys and asses. Modern India has mined from deep sea, hard-to-extract and then piped and bottled natural gas for Modern India’s kitchens. And Modern business in India wants young men to work harder than the patient—rarely complaining and possibly more efficient—donkeys.
We are a strange land. And I often feel like a stranger in it.
But it seems that we are a country full of asses after all.
(V Shantakumar is the former chairman & CEO of Saatchi & Saatchi in India and now the managing partner of Doing Think)