Working hard to ensure small investors' savings not put to risk: SEBI chief

New Delhi, May 1 (ANI): Market regulator Securities and Exchange Board of India (SEBI) chief U.K. Sinha has said that he and his colleagues are working hard to ensure that small investors' savings are not put to risk.

Speaking in the aftermath of lakhs of investors being defrauded by Ponzi schemes in West Bengal and parts of north east India, Sinha on Wednesday said the government is seriously considering a strengthening of laws to regulate all kind of collective investment schemes (CIS).

He pointed out that SEBI has some legal limitations and he would not be able to comment on specific issues concerning specific companies as there have been some court and quasi-judicial orders as well in certain cases.
He was replying to queries about an alleged fraud by Kolkata-based Saradha group through its investment schemes.

SEBI has already passed an order against Saradha Realty India to close all its collective schemes and refund the money collected from investors within three months.

The market regulator has also barred Saradha Realty India and its Managing Director Sudipta Sen from the securities markets till the time it winds up all its CIS and refunds the entire money to investors.

In wake of the controversy surrounding the chit-fund scam involving Saradha Group in West Bengal, Prime Minister Dr. Manmohan Singh has pointed out the need for curbing unauthorised collection of deposits.

"Unauthorised collection of deposits, in exchange for the promise that exorbitant rate of return will be given, is something which has to be curbed," Dr. Singh said earlier this week.

The Ministry of Corporate Affairs has also decided to set up a Special Task Force in the Serious Fraud Investigations Office (SFIO) to investigate the affairs of such companies.

The ministry has taken note of the misuse by certain "chit fund companies" who have raised huge sums of money from the public at large,
The state governments are the appropriate authorities for regulation of such chit Fund companies/Schemes under the Chit Funds Act 1982.
However, in view of the larger public interest involved in these cases, and concerns regarding misuse/laundering by such companies of the ill gotten wealth, and the possibility that the promoters of these companies may strip these companies, it has been decided by the Ministry of Corporate Affairs to set up a Special Task Force in the Serious Fraud Investigations Office (SFIO) to investigate the affairs of such companies.
Accordingly, all investigations into such companies are being entrusted to SFIO with immediate effect.
The task force will also co-ordinate with other law enforcement agencies and regulators wherever required.
The Saradha Chit Fund scam has robbed thousands of investors of their savings in West Bengal and Assam. A Kolkata sub-divisional magistrate"s court had on Thursday remanded Saradha Group chief Sudipto Sen and two others to 14-day police custody.
The Congress and the CPI-M have demanded a CBI enquiry into the scam. The Assam Government is also in favour of a CBI probe in the matter. (ANI)
JEEUTIKA SINHA
PGDM 2nd sem