MLM cleanup should pave the way for Indian Financial Code
It takes one event to pull the thread and the MLM firm collapses like a house of cards.
If you drive down from Chennai to Pondicherry, it is not unusual to see a furry, beaked head poking out over a high wall, looking quizzically at the world go by the yard in which it lives. The six-feet bird came as an import from Australia and, unknowingly, became a part of a multi-crore scam in Tamil Nadu that defrauded hundreds of thousands of people. Emu farming promised super normal returns – invest in emu chicks, they get fat on your money and are then sold for their meat and oil, doubling or tripling your initial money. Sounds far-fetched? It may to you, but some 500 crore of real retail money bought the scheme. It isn’t as if people only in the south are gullible; 1,600 kms north of Chennai, in West Bengal, an even larger bunch of people at the bottom of the pyramid collected every rupee they could and invested in real estate deals, teak farms and in products as bizarre as potato bonds that offered to double money in a short time. And it isn’t as if it is the rural poor that are gullible, Indians in urban areas have got burnt taking online surveys or trusting their money to a stock guru for multi-bagger rewards. One newspaper report (http://bit.ly/15TnxY8) puts the size of fraudulent deposit-taking schemes just in West Bengal at 70,000 crore. There is no estimate for the size of the problem across the country but we can conjecture that it will be in trillions and not billions.
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