Millennium Post

Great alacrity shown when big investors are duped, small fish can wait!

However, on the other hand, where big investors have been duped, such laws have been invoked where money can return to investors at great speed.

“Investigating agencies have adopted the natural process of law while probing the Saradha chit fund, Pearl Group scam and Rose Valley scam, where small investors have suffered. And, the process is such that for the investors to get their money back they have to wait for the final conviction in the cases pending before the court. This could drag on for a decade. However, in scams like the National Spot Exchange Ltd (NSEL) scandal, the government acted with great alacrity,” said a senior official in Ministry of Finance.

Explaining how government helped big investors in the NSEL scam, the official said the matter was initially being probed by the Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and Mumbai Police’s Economic Offences Wing (EOW). The ED even attached properties worth Rs 700 crore of the persons allegedly involved. However, the government intervened and asked the Mumbai police EOW to register a case under Maharashtra Protection of Interest of Depositors (MPID)Act.  

“MPID Act helps the investors as they don’t have to wait till the conviction in a ponzi scam for their refunds. After filing the charge sheet in the case, under MPID Act, the competent authorities are allowed to auction the attached properties before conviction and refund the money to investors,” said Pravinkumar T Padwal, DCP, Mumbai Police-EOW. 

Explaining advantages under MPID, Padwal said: “Whereas ED can attach only those properties which are considered to have been obtained from the proceeds of crime, under the MPID Act the agencies can attach the assets of the company owners, its promoters, directors, and employees, if need be, to recover the full amount of the investors.”

“Applying MPID act in NSEL scam was a good move, and it was for the benefit of the investors. However, such acts are not applied in other major ponzi scams where millions of poor people have invested their hard earned money. The government has given the impression that it is more interested in protecting the interest of big investors by selectively applying such laws,” said a concerned senior ED official.

He further said that the scams which are under CBI and ED probe may take more than a decade to reach their final conclusion. “Does the current government want the poor investors to wait for the final conviction to get their money back? If it does not, it should apply appropriate laws while dealing with cases like Saradha and Rose Valley too,” the official further said.  

Biggest Ponzi Schemes 
  •   The Bhangoo-led Pearls Group collected Rs 45000 crore from 55 million investors
  •   Saradha Group collected around Rs 200 to 300 billion from over 1.7 million investors
  •   NSEL scam collected Rs 5600 crore from 13000 investors
  •   Rose Valley group allegedly floated a total of 27 companies for running the alleged chit fund    operations and collected Rs 15,000 crore 
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