Maharashtra warns investors to be wary of ponzi schemes

The Maharashtra home department has launched an advertisement campaign targeted at investors and members of the public, asking them to be careful while investing in schemes announced by ponzi companies and multi-level marketing firms. The department said as investors were being lured and duped by several such companies, they had been alerted not to fall prey to these schemes.

In case investors are cheated by such companies, they should file complaints with the local police immediately, the government has said. The home department said the Maharashtra Protection of Interests of Depositors Act (in Financial Establishments) had been effective since 1999 and this offered relief to depositors duped by non-banking financial institutions.

A senior official told Business Standard the home department's appeal through advertisements followed the recent arrests of various people involved in ponzi companies and multi-level marketing firms by the Economic Offences Wing (EOW) of the Mumbai Police. The EOW had registered a case of cheating and criminal conspiracy against MMM India for allegedly duping about 70,000 people of about Rs 2,000 crore. Allegedly, the company had promised unrealistic returns to investors.

The EOW had also registered a case against Hong Kong-based QNet, for allegedly duping thousands of investors by selling them plastic and glass products, saying these were miraculous objects and could cure severe diseases such as cancer. The EOW has already arrested eight of the company's agents and independent representatives and frozen the bank accounts of these people.

The EOW has also been investigating a scam involving Singapore-registered Speak Asia Pte, which had allegedly raised money from a large number of people, under the garb of running an online survey company. The company operators are believed to have duped about 2.4 million investors of an estimated Rs 2,276 crore.