(a) whether suggestions have been received from various quarters including
the Serious Fraud Investigation Office (SFIO) for setting up of a Central
Institution for checking cases of frauds indulged in by the Chit-funds
and Multi-level Marketing Companies/Schemes;
(b) if so, the details thereof and the time by which it is likely to be
set up;
(c) whether the Union Government has also consulted the State
Governments in this regard; and
(d) if so, the reaction of the State Governments thereto?
THE MINISTER OF CORPORATE AFFAIRS (DR. M. VEERAPPA MOILY)
(a) to (d) A Statement is laid on the Table of the House.
STATEMENT REFERRED TO IN REPLY TO PART (a) TO (d) OF LOK SABHA STARRED
QUESTION NO. 309 FOR 26th APRIL, 2012 TABLED BY SHR! SANJAY BHOI,
SHRI EKNATH M. GAIKWAD REGARDING CHIT FUNDS AND MLM FRAUD CASES.
(a)&(b) Except for the Serious Fraud Investigation Office, no suggestions
have been received from any other quarters for setting up of a Central
Institution for checking cases of frauds indulged in by the Chit-funds
and Multi-level Marketing Companies/Schemes. SFIO in a recent investigation
report relating to some multi-level marketing companies has suggested setting
up of a regulatory body/cell to examine all the schemes of MLM running in
the country in a time bound manner.
(c)& (d) Since the Ministry of Home Affairs is already regulating the Prize
Chits and Money Circulation Schemes (Banning) Act, 1978, this Ministry has
very recently written to the Ministry of Home Affairs that it has no
reservation if such regulatory body as suggested by SFIO is set up within
the Ministry of Home Affairs to check the cases of frauds being indulged in
by such Multi-level Marketing Companies as is being done in cases of Chit-funds.