Ponzi schemes resurface as multi-state coop societies

olkata: After having made themselves scarce for more than a year in West Bengal, Ponzi schemes seem to be back in business in the state under a new garb, that of the ‘multi-state cooperative society’.

“We recently conducted an inquiry and found that certain organisations, by obtaining registration as a multi-state cooperative credit society (MSCS) from the Centre, are raising money from the common public by promising huge returns.

Neither do they have a no-objection certificate from the state nor any kind of RBI permission,” State Cooperative Minister Jyotirmoy Kar told PTI.

“We suspect that chit-fund companies/Ponzi schemes which used to operate in the eastern states may be using the guise of MSCS to raise money. These companies may be taking advantage of the MSCS Act to evade legal action,” he said.

After the Saradha bubble burst in April, 2013, several Ponzi schemes and chit-fund companies had to wind up their operations as central and state agencies cracked the whip amid protests by lakhs of defrauded investors.

MSCS is cooperative society which operates in more than one state and has a minimum of 50 members in one state.