SFIO has also been ordered scrutiny of balance-sheets of around
80 companies to ascertain whether these MLM operators have violated the
provisions of the Companies Act
New Delhi: A total of 87 companies have come under the government scanner for allegedly running illegal multi-level marketing (MLM), investment schemes and seven of them are being probed for possibly serious frauds, reports PTI.
The government has ordered inspection of accounts of remaining 80
companies for any violation of company regulations, Corporate Affairs
Minister Sachin Pilot informed Lok Sabha in a written reply.
Most of these companies are located in West Bengal and Tamil Nadu and one company registered outside the country doing business online in association with some Indian companies, he said.
Pilot further said that Ministry has ordered Serious Fraud Investigation Office (SFIO) to probe into the affairs of seven companies.
Besides, SFIO has also been ordered scrutiny of balance-sheets of the
remaining 80 companies to ascertain whether the firms have violated the
provisions of the Companies Act.
Raising of funds through money circulation scheme is an offence under
the Prize Chits and Money Circulation Schemes (Banning) Act 1978. The
Act is administered by the Department of Financial Services through the state governments.
Recently, Finance Ministry in consultant with RBI have circulated model rules to be notified by the states.
In order to protect the interest of small investors, various awareness
programmes are being conducted regularly by the ministry in coordination
with the trade and industry association and professional institute such
as Institute of Chartered Accountants of India (ICAI), Institute of
Cost Accountants of India.
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