Clearer laws on tackling fraud schemes soon: Sachin Pilot

NEW DELHI: Corporate Affairs Minister Sachin Pilot today said the government will remove as early as possible the ambiguities in laws aimed at tackling fraudulent investment schemes.

Pilot's comments come against the backdrop of global direct selling firm Amway's India Chairman William S Pinckney and two company Directors being arrested by the Kerala police over allegations of fraud.

"We ( Corporate Affairs Ministry) will work closely with concerned ministries and industries to remove the ambiguity in the law (related to tackling ponzi and other fraudulent schemes) as soon as possible," Pilot told PTI.

Commenting on the Amway incident, he said that it "is disappointing that such an eventuality came about."

Pinckney, Malhotra and Budhraja, who have been given conditional bail, were arrested by the Wayanad Crime Branch (Economic Offences) wing from Kozhikode in connection with three fraud cases registered in Wayanad district.

They were booked under the Prize Chits and Money Circulation Schemes (Banning) Act based on complaints filed by distributors in 2011.

"While steps should be taken to crack down on fraudulent companies running dubious investment schemes, companies that are reputed and abiding by the law must be delineated," the Minister said.

"Such events (like Amway) might negatively affect the prospects of our country as an attractive investment destination," he noted.

In the wake of Saradha fiasco in West Bengal, government has initiated a multi-pronged crackdown on companies running ponzi and fraudulent schemes besides making efforts to protect the interest of investors.

"While we take strong actions against ponzi schemes, we need to be careful not to create a vitiating atmosphere for reputed and law abiding companies," Pilot said.

Pilot also emphasised the government would leave no stone unturned in cracking down on companies running ponzi schemes.

While chit funds laws are implemented by state governments, collective investments, except for certain classes, come under capital market regulator Securities and Exchange Board of India ( Sebi). Non-banking financial companies are governed by the Reserve Bank of India.

Amid rising instances of people getting duped by fraudulent money raising activities, there are increasing voices favouring single regulator for investment schemes.