Saradha fallout: Mumbai EOW steps up vigil on chit fund, ponzi companies

The economic offences branch of Mumbai police has already updated list of such units functioning in city, collects information from RBI & Sebi

Close on the heels of Saradha chit fund scam in West Bengal, the Economic Offence Wing (EOW) of the Mumbai police has launched regular interaction with the  financial intelligence wing of the Central government and also with the West Bengal government to exchange necessary information with regard to Saradha and such other chit funds, multi-level marketing (MLM) companies and ponzi firms operating here.

EOW has already updated the list of such units functioning in the city and collected information from Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi).

Besides, the state government has asked the district police to closely watch the present developments and take punitive action against such companies after they receive complaints to protect the interest of investors.

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

Further, a senior police officer, who did not want to be identified, said the intelligence unit at the EOW has been assigned with a specific job of keeping a close eye on the operations of chit funds, multi level marketing units and ponzy firms. We are receiving inputs from the financial intelligence of the Central government. We will take necessary action after the complaint is lodged.”

As far as the multi-crore Speak Asia fraud unearthed way back in August 2011, the officer said a special investigation team has been formed to carry out probe which was until recently stalled due to legal proceedings in the apex court.

However, the investigations have re started after the apex court has revoked its earlier ban. The state government then had estimated Speak Asia scam worth Rs 2,000 crore wherein the money was sent out of the country. Cases had been reported against the Singapore-based company in other parts of the world and added that about 20 lakh people could have been duped in all.

Meanwhile, BJP leader Kirit Somiaya in a letter addressed to the chief minister Prithviraj Chavan said Maharashtra is seating on such time bomb of Rs 10,000 crore involving more than 10 lakh  small innocent investors and more than 1 lakh  young agents.

In India, Maharashtra has the largest number of such "fraudulent scandelous" MLM, Chit Fund, Ek ka Double Ponzy companies. Somaiya has requested the chief minister to look into the matter and order immediate action against such companies.