Maharashtra government may amend MPID Act to check fraudulent investment schemes

The Maharashtra government may consider making amendments in law to protect depositors and keep a check on companies duping investors with fraudulent schemes, Chief Minister Devendra Fadnavis said on Wednesday. The chief minister was responding to a Calling Attention motion moved in the state Legislative Council by Congress member Satej Patil over Pancard Clubs, a private company running collective investment schemes, termed illegal by the market watchdog Sebi. The Pancard Clubs has allegedly trapped over 5100000 investors, he said, adding that the Securities and Exchange Board of India (Sebi) and the Economic Offences Wing (EOW) have collectively attached its properties worth over Rs 4,5000000000. The SEBI and the EOW are in the process of liquidating the company’s assets to pay back the duped investors, he said. The money trail of the accused is being investigated to make the case stronger against them, Fadnavis said. Jayant Patil (of the Peasants and Workers Party) then sought to know if the government would bring about a law to keep a check on firms that crop up to gobble up the investors’ funds through fraudulent schemes and later disappear. Responding to him, Fadnavis said, “We will see if amendments can be made to the existing Maharashtra Protection of Interest of Depositors In Financial Establishments (MPID) Act to bring such companies under its ambit.” He said that strict action will also be taken against those companies which place advertisements in newspapers to lure people to invest in their fraudulent schemes. The Pancard Clubs had failed to comply with Sebi’s direction in February 2016 ordering it to refund to investors over Rs 7,0000000000, raised through illegal collective investment schemes. The company had mobilised Rs 7,0350000000 from 51,55,516 investors from 2002-03 to 2013-14 through its various holiday schemes.