In a bid to protect the depositors’ interest in Ponzi schemes run by financial companies, against whom cases have been registered, and monitor cases pending in various courts, the State government on Saturday appointed Bengaluru Regional Commissioner to compile the status of all cases that have been filed in the State and coordinate with the district administration.
The finance companies running ponzi schemes could dupe investors completely and if movable and immovable properties belonging to these companies are not attached, there is a possibility that investors’ interest cannot be protected since these properties could be sold, the government said in its proceedings appointing the Regional Commissioner. Since this action against the Ponzi scheme companies has to be moved as early as possible, and the action taken reviewed frequently, the Regional Commissioner, Bengaluru, has been appointed to supervise all the cases.
The order comes in the light of the Reserve Bank of India identifying 118 finance companies in the State and seeking action against them under the Karnataka Protection of Interest of Depositors in Financial Establishment Act, 2004 and Banning of Unregulated Deposit Scheme Act, 2019. A series of meetings after the RBI flagging the issue to the State government found that the action pertaining to these 118 finance companies was not at the expected level. The issue had been discussed in several meetings over the last few months by the Nodal Committee for Ponzi Schemes and State-level Coordination Committee.
In Bengaluru alone, more than a dozen Ponzi schemes, including the most recent and biggest financial fraud committed by IMA, have caused losses running into several thousands crores, affecting at least 50,000 depositors. The halal investment scheme run by IMA alone has affected over 30,000 investors in the State.
Accordingly, the Regional Commissioner will hold monthly meetings with Deputy Commissioners and Superintendents of Police to review the developments and submit a report to the State government on pending cases against these financial companies in special courts and high courts.
