SEBI will help those duped by ponzi schemes to get back money
In a major relief to depositors duped by ponzi schemes, the Securities and Exchange Board of India (SEBI) on Saturday said its new powers would help in recovery of money from the fraudulent firms and return them to the investors.india Updated: Jul 27, 2013 22:17 IST
In a major relief to depositors duped by ponzi schemes, the Securities and Exchange Board of India (SEBI) on Saturday said its new powers would help in recovery of money from the fraudulent firms and return them to the investors.
"Through the new ordinance, SEBI can search and seize ponzi companies besides recovering their properties and returning it to the investors," SEBI chairman UK Sinha told a national seminar on 'Investors Education and Protection for Inclusive Growth' in Bhubaneswar.
Stating that the regulator was determined to comedown heavily on ponzi companies, Sinha said, "SEBI has taken several initiatives to protect the interests of the common investors." Consequent upon the recent amendments, SEBI has been empowered to initiate stringent action against unauthorised chit funds and other financial agencies running a business violating rules and regulations, Sinha said.
In a major upgrade of powers given to SEBI, government has allowed it to pass orders like search and seizure, attachment of properties, arrest and detention of defaulters and pass disgorgement directions to recover the wrongful gains made in contravention of laws.
As per amended law, Sebi can regulate any money pooling scheme worth Rs 100 crore or more and attach assets in cases of non-compliance.
Inaugurating the seminar, Odisha chief minister Naveen Patnaik laid emphasis on the needs to safeguard the money of the investors through strict regulations and education.
He asked the banks to open more branches in rural areas to enable to villagers to deposit their hard-earned money in banks and post offices, instead of parking them in illegal companies.
"Since SEBI has opened a local office in Bhubaneswar, investors will get the opportunity to redress their grievance and get educated to help inclusive growth," Patnaik said.