'Home Ministry can set up SFIO type body to probe fraud by MLM companies'

NEW DELHI: The Corporate Affairs Ministry has said the Home Ministry can set up a SFIO-type special body to probe frauds by the multi-level marketing ( MLM) companies.

"This Ministry has very recently written to the Ministry of Home Affairs that it has no reservation if such regulatory body as suggested by SFIO is set up within the Ministry of Home Affairs to check the cases of frauds being indulged in by multi-level marketing companies as is being done of chit funds," Corporate Affairs Minister Veerappa Moily said in a reply to the Lok Sabha today.

The Home Ministry already looks into cases against chit funds, empowered by the the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

The Minister said the Serious Fraud Investigation Office (SFIO) had suggested "setting up of a regulatory body/cell to examine all the schemes of MLM running in the country in a time-bound manner".

Corporate fraud investigating body SFIO is probing the multi-level marketing company Speak Asia Online and chit fund company Gold Quest International.