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Maharashtra Mulls Action Against Bogus Chit Fund Cos Under MPID Act

Monday, June 22, 2015
By A Business Reporter

Chit fund companies operating in Maharashtra have come under the scanner of the state government, which is considering to take strict action against these dubious establishments to recover investors' lost money. Infact, Chief Minister Devendra Fadnavis has called a meet of SEBI officials, the Enforcement Directorate and police officials, to take a financial decision in this regard.

On June 9, BJP MP Kirit Somaiya had submitted a list of 162 companies to the Security Exchange Board of India (SEBI) and Fadnavis in connection with the matter. On action by the state government after the submission of the companies list, Ranjeet Patil, Minister of state for Home (Urban) said, "the state government is considering to take strict action against chit fund companies and hence Chief Minister has called a meeting next week."

Somaiya had claimed that the bogus chit fund companies have duped investors in the state to the tune of Rs 40,000 crore. After his submission of the list, Fadnavis had asked Additional Chief Secretary of the Home department to probe into the issue.

"We have a challenge before us to recover the huge investments of small investors that are stuck in sealed bank accounts of bogus chit fund companies. We have also seized properties of such companies and some chit fund companies continue to operate their businesses," Patil said.

"The CM is in favour of investors and wants to take action against bogus companies. He wants to discuss the aspects of the Maharashtra Protection of Interest of Depositors (MPID) Act, if applied against chit fund companies and hence has called a joint meeting on June 22," Patil said.

Additional Chief Secretary (Home) is also expected to make a presentation of the MPID Act and the manner in which it could be applied on bogus chit fund companies. Patil further said that a few foreign companies had approached the state government in January this year and had shown interest in helping the government to recover money from chit fund companies.

While refusing to name the companies, Patil said that though it is pre-mature to say anything much but the government may conduct an auction of seized properties of chit fund companies."We might consider auctioning the properties of these companies to repay investors," he said. (PTI)

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