Deposit-collecting cos must carry disclaimers in face of Ponzi menace

The latest move comes against the backdrop of rising instances of people getting duped by illegal money pooling schemes and efforts being made by governments as well as regulators to protect the interest of investors from ponzi activities.

The disclaimer requirement has been introduced by way of amendments to the rules governing acceptance of deposits under the Companies Act. Now, companies have to carry the disclaimer in the circular or circular in the form of advertisement seeking deposits from the public.

“It is to be distinctly understood that filing of circular or circular in the form of advertisement with the Registrar should not in any way be deemed or construed that the same has been cleared or approved by the Registrar or Central Government,” as per the revised norms. These wordings should be part of the disclaimer.

In this regard, the Corporate Affairs Ministry has made changes to the Companies (Acceptance of Deposits) Rules. “The Registrar or Central Government does not take any responsibility either for the financial soundness of any deposit scheme for which the deposit is being accepted or invited or for the correctness of the statements made or opinions expressed in the circular or circular in the form of advertisement.

“The depositors should exercise due diligence before investing in the deposit schemes,” according to the disclaimer. A senior official said the ‘disclaimer’ requirement has been introduced as part of efforts to rationalise and strengthen the rules.

Due care has been taken to ensure that unscrupulous entities do not indulge in ponzi schemes in the name of deposit taking schemes, the official added. The Ministry has mandated that the disclaimer should be part of Form DPT-1, which is used by entities seeking deposits.