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Ponzi schemes: Government lens on 63 companies this fiscal

Ponzi schemes: Government lens on 63 companies this fiscal
Highlights

The Serious Fraud Investigation Office (SFIO) has taken up probes into 63 companies in the current fiscal for allegedly indulging in illegal money pooling activities, or Ponzi schemes. This translates to an average of seven companies being referred for investigations per month (since the figures are till December 18).

NEW DELHI: The Serious Fraud Investigation Office (SFIO) has taken up probes into 63 companies in the current fiscal for allegedly indulging in illegal money pooling activities, or Ponzi schemes. This translates to an average of seven companies being referred for investigations per month (since the figures are till December 18).

HIGHLIGHTS

  • Government has taken up probes into 63 companies in the current fiscal for allegedly indulging in illegal money pooling activities, or Ponzi schemes
  • The number could go up since there are three months to go before the financial year comes to a close
  • In 2015-16, 47 such companies were investigated and 27 in 2016-17

A typical 'ponzi' scheme involves the operator collecting a large amount of money from investors and paying them returns from their own money or the money collected from subsequent investors, rather than from profit earned by the person or the entity operating such a scheme.The count of such companies being referred to the white collar crime probe agency is also the highest in the last three financial years, according to data available with the corporate affairs ministry.

The agency comes under this ministry, which is implementing the Companies Act. A total of 63 companies which were involved in "chit fund/MLM (Multi-Level Marketing)/ ponzi activities" have been assigned to the SFIO for detailed probes.The number could go up since there are three months to go before the financial year comes to a close.

In 2016-17, the number of such companies that came under the SFIO lens was just 27 - much lower than 47 seen in 2015- 16.The number could go up since there are three months to go before the financial year comes to a close. In 2016-17, the number of such companies that came under the SFIO lens was just 27 - much lower than 47 seen in 2015- 16.

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