Sebi Warns Public Against Illicit Money Pooling Schemes

Published: 29th July 2015 07:32 PM  |   Last Updated: 29th July 2015 07:32 PM   |  A+A-


NEW DELHI: Making public a list of 91 firms involved in running illegal money pooling schemes, Sebi today cautioned investors and general public against dealing with such entities and asked them to approach the regulator and local police if these firms are found mobilising funds.           

These 91 companies, against which Sebi has already passed orders, include Sun-plant Agro, NGHI Developers India, MPS Greenery Developers, Saradha Realty India, Alchemist Infra Realty and Rose Valley Hotels & Entertainment.    

The order has been passed against these companies for running unregistered Collective Investment Schemes (CIS).       

Securities and Exchange Board of India (Sebi) further said Gift Collective Investment Management Company Ltd is the only company registered with it to undertake CIS activities.   

Cautioning general public, Sebi has advised investors to bear cautionary checks before investing in a CIS like "whether the entity is registered with Sebi, whether the scheme has filed an offer document with Sebi, subscription to CIS units is permitted only though a banking channel, no cash transactions are permitted, no guaranteed or assured returns are permitted."  

The warning to investors comes as certain entities were mobilising money through illegal investment schemes even after the regulator had directed them not to raise any further money and not to launch any new schemes, among others.           

In case, any of the unregistered entity is found to be collecting money, Sebi said "investors are advised not to subscribe to such schemes and to report the same to Sebi and State authorities including police authorities immediately, along with appropriate details/documents."            

The market regulator, since January 1, 2011, has passed orders against these 91 entities and their respective directors carrying on unregistered CIS.       

Sebi has 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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