Millennium Post

Sebi warns against repeat ponzi frauds

Making public a list of 51 entities, which included many from West Bengal, the capital market watchdog asked investors not to invest in their illegal schemes that claim to offer much higher returns than banks and other registered entities.

Further, Sebi has asked the investors to report such unauthorised money pooling activities to the market regulator, state authorities including police "immediately, along with appropriate details/documents".

The list of 51 entities banned by Sebi from raising funds include names like Saradha Realty India, Rose Valley Real Estate & Constructions, Sai Prasad Properties, Sun-plant Agro, NGHI Developers India and MPS Greenery Developers.

"It has come to the notice of Securities and Exchange Board of India (Sebi) that certain companies/entities unauthorisedly, without obtaining registration and illegally are collecting/mobilising money from the general investors by making false promises, assuring high return, etc," the market regulator said.

"Investors are advised to be careful if returns offered by the person/entity is very much higher than the return offered by regulated entities like banks, deposits accepted by companies, registered NBFCs, mutual funds etc," Sebi said.

The regulator further said it "does not regulate any scheme or arrangement made or offered by Cooperative Society, Deposits accepted by Non-Banking Financial Companies (NBFCs), among others, and investors should not invest in any company that is not registered and regulated.
Companies blacklisted by Sebi also include PACL, Sumangal Industries, MVL Ltd, KBCL India, Nicer Green, Alchemist Infra Realty, HBN Dairies, Kim Infrastructure & Developers, Green Ray International, Royal Twinkle Star Club, Ecogreen Realestate (India) Ltd, Peers Allied Corporation, Green Buds Agro Farm. Collectively, these entities are estimated to have raised over Rs 1 lakh crore from the public.

Sebi said it has observed that certain entities were mobilising money under investment schemes even after the market regulator "directed the entity not to collect any further money, not to launch any new schemes etc, which is unauthorised and illegal".

The market regulator, since January 1, 2011, has passed orders against 51 entities and their respective directors carrying on unregistered 'Collective Investment Schemes (CIS). Out of these, orders have been passed against 32 entities in 2014 itself.

Sebi said it does not regulate entities in businesses like chit funds, pension schemes, as also banned activities like multi-level marketing and pyramid schemes.

It also asked investors to bring such schemes to the notice of various agencies such as RBI, CBI, Ministry of Corporate Affairs, PFRDA, IRDA, state and police authorities, besides Sebi. Sebi has been given greater powers to deal with the ponzi menace, which typically involves money being raised from investors with promise of high returns and old investors being given returns from funds collected from new subscribers to such schemes.
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