Mumbai Police steps up vigil on chit funds, ponzi firms

The police has already updated list of such units functioning in the city, collects information from RBI & Sebi

The Economic Offences Wing (EOW) of the city police has launched an interaction with the central and Bengal governments to exchange necessary information with regard to chit funds, multi-level marketing (MLM) companies and ponzi firms operating here.

The EOW has updated the list of such units functioning in the city and collected information from the Reserve Bank of India and the Securities and Exchange Board of India. Besides, the state government has asked the police to closely watch the present developments and take punitive action against such companies after they receive complaints, to protect the interest of investors.

"The police cannot take any suo moto action against such companies unless they receive formal complaint. Once such a complaint is received, action will be initiated under the provisions of the Indian Penal Code," Minister of state for home Satej Patil told Business Standard.

A senior police officer, who did not want to be identified, said the intelligence unit at the EOW has been told to keep a close eye on the operations of chit funds, multi level marketing units and ponzi firms. "We are receiving inputs from the financial intelligence of the central government. We will take necessary action after a complaint is lodged," he said.

Bharatiya Janata Party leader Kirit Somiaya in a letter to CM Prithviraj Chavan said Maharashtra was "sitting on a time bomb of Rs 10,000 crore involving more than one million investors."

"In India, Maharashtra has the largest number of such fraudulent and scandalous MLMs, Chit funds and Ponzi companies," he said.

Somaiya requested the chief minister to look into the matter and order immediate action against such companies.