SFIO Probing 8 Cases Involving 84 Ponzi, MLM and Chit-fund Companies: Govt
Moneylife Digital Team 05 April 2022
Reiterating that Ponzi schemes are banned under Prize Chit and Money Circulation Schemes (Banning) Act, 1978 and as per the Act, state government is the enforcement agency, the Union government says it has asked serious fraud investigation office (SFIO) to probe as many as 84 companies.
In a written reply, Rao Inderjit Singh, minister of state in the ministry of corporate affairs (MCA), says, "Although the term 'Ponzi schemes' is not defined under the Companies Act, 2013, the MCA has ordered and assigned investigation into the affairs of a number of companies which are allegedly involved in Ponzi, multi-level marketing (MLM) and chit fund activities. During the last three years eight cases involving 84 companies have been assigned to SFIO."
He, however, did not reveal names of the companies that are being investigated by SFIO.
Mahesh Poddar, a member of Parliament (MP) from the Rajya Sabha had enquired about the measures taken by the government against Ponzi schemes.
The minister of state told the upper house that the investors education and protection fund (IEPF) authority, in collaboration with partner institutes, organises investor awareness programmes across the country. 
"Till date more than 62,678 such programs across 604 districts of 30 states and Union territories (UTs) by engaging 29.19 lakh citizens have been conducted. The primary focus of these programmes is to make the participants aware of 'Dos and Don'ts' while making any Investment and to sensitize them about various fraudulent and Ponzi schemes," he added.
Two years ago, the ministry of finance has notified the Banning of Unregulated Deposit Schemes (BUDS) Rules which provide for a comprehensive mechanism to tackle illicit deposit-taking activities and Ponzi schemes. (Read: Govt Notifies Rules for Banning Ponzi Schemes, Unregulated Deposits under BUDS Act)
Almost eight years ago, Sachin Pilot, the then minister of corporate affairs, had informed the Parliament that the SFIO was probing 67 companies for running Ponzi or money circulation schemes. As per the list provided at that time by the minister, complaints of financial fraud have been received against Saradha group's 10 entities such as Saradha Realty, Saradha Agro Development, Saradha Exports and Saradha Garden Resorts & Hotel.
Besides, the list included names of 14 entities related to Rose Valley Group including Rose Valley Industries, Rose Valley Marketing and Rose Valley Hotels and Entertainment. 
Vaishnavi Corporate Communication, Speak Asia, Reebok India, Alchemist Infra were among the other companies against whom complaints have been received, according to the list. (Read: SFIO probing 67 companies for running Ponzi, MLM schemes)
You may want to read our coverage on MLM/Chain Money schemes from this link https://moneylife.in/economy-and-nation/mlm-chain-money
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