Mumbai: The Bharatiya Janata Party (BJP) has demanded a Central Bureau of Investigation investigation into the operations of more than 1,200 multi-state cooperative societies to find out if they are running illegal collective investment or ponzi schemes.
BJP member of Parliament Kirit Somaiya on Friday said over 1,200 such societies have been registered over the last 5 years. Some of these societies are running nearly 200 ponzi schemes in violation of the Securities and Exchange Board of India (Sebi) rules, Somaiya claimed.
“The money involved in these schemes is to the tune of ₹ 20 million crores. Half of this amount is locked up in only 11 big ponzi schemes being run across states," Somaiya said.
The BJP MP said nearly 600 of the 1,200 multi-state societies are registered in Maharashtra, making the state highly vulnerable to cases of cheating and embezzlement of money invested by small and medium investors.
Somaiya released a list of entities that the Sebi has acted against for running ponzi schemes and illegally issuing securities to people. The list, which the Sebi issued to Somaiya in response to his intervention in the matter, has 284 entities who “have been running unregistered collective investment schemes and companies issuing securities to public under the garb of private placement".
Of these entities, the Sebi has issued orders against 91 for carrying out unregistered collective investment schemes and 193 have been served notice for issuing securities to people in violation of the Sebi Act and regulations.
Somaiya pointed out that Sebi had issued orders against 73 of the entities running ponzi schemes only after May 2014, when the BJP came to power at the centre. Similar is the case with entities offering securities to people in violation of rules, he alleged.
“Why has SEBI been so reluctant to act against these entities even though they have been flouting rules since 2011," Somaiya asked.