Date
18 December 2017
India's markets regulator is cracking the whip on unregistered investment funds and suspected Ponzi-like schemes.
India's markets regulator is cracking the whip on unregistered investment funds and suspected Ponzi-like schemes.

India regulator cracks down on shady investment schemes

The Securities & Exchange Board of India (SEBI), is cracking down on unregistered investment schemes and dubious entities that tout businesses such as goat farms, Bloomberg News reported.

The markets regulator has issued orders against 39 companies since May, more than four times the number it censured in the previous 12 months, according to the report. The firms are instructed not to collect any money from the public or start new funds.

Entities that have already collected money have been ordered to return investors’ funds and cooperate with investigators to avoid criminal charges.

SEBI is targeting financial scams, such as those by Kolkata-based Saradha Group, which imploded last year leading to several investor suicides, an official source was quoted as saying.

The regulator also is seeking to close legal loopholes used by shadow financier and Sahara Group promoter Subrata Roy.

Sahara collected money from street-food sellers, auto-rickshaw drivers and other workers over 30 years, allowing Roy to build a huge business empire that includes hotels, television channels and retail shops.

In 2011, SEBI issued a US$4 billion refund order to Sahara for raising money from 30 million people without the agency’s approval. 

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