Plantation Companies scam - 7 lakh duped, only 78,000 got money..
Fraudulent companies that promised pots of gold at the end of the rainbow collectively raised over Rs 1,200 crore in Mumbai alone between 1996-2005. Details of cases registered under the MPIDA show that over seven lakh people collectively invested in the various schemes floated by the fly-by-night operators, but only 78,000 could actually recover their money. And the amount distributed to the investors following the intervention of the police and the courts stood at a meagre Rs 19 crore.
In the late 1990s, several schemes that looked attractive on paper were floated by companies like CU Marketing, Suman Motels, Kuber Group besides several plantation companies like Parasrampuria Plantation, Anubhav Plantation. In fact a host of plantation companies mushroomed in the 1990s, luring the public to invest with them. In a typical plantation scheme, the company invited people to invest money in ‘teak-units’ and assured them of a specified quantum of teak (or cash) as returns after a specified lock-in period, which was usually very long. Typically, an investment of Rs 1,275 in a teak tree was to fetch Rs 62,000 or 37.5 cubic feet of teak at the expiry of 20 years. There were slight variations in the offers made by different teak plantation companies.
The MPIDA, introduced in 2000, was meant to protect investors who were being duped by financial establishments offering various schemes with huge returns, without any obligation to refund the same. The Act was enacted at the instance of the RBI, which suggested that the state come up with a legislation as the existing ones were found inadequate to deal with the growing number of such companies. The Act carried a six year-imprisonment on conviction and a fine of Rs 1 lakh.
Police officials say there have been only six convictions before the Act was struck down by the Bombay high court in 2005. In other cases, the chargesheets have been submitted but the trials could not proceed since the Act was struck down.
Police officials said that the public ought to be careful while investing in companies that offer exceptionally huge returns. “It’s greed and easy money that makes people fall for these schemes. They do not realise that it is not a viable business proposition.’’
The state government has now decided to set up units of the Economic Offences Wing in the districts too considering that several ponzi schemes are proliferating there. It is estimated that the amount involved in recent cases being handled by the EOW adds up to over Rs 600 crore.
In the late 1990s, several schemes that looked attractive on paper were floated by companies like CU Marketing, Suman Motels, Kuber Group besides several plantation companies like Parasrampuria Plantation, Anubhav Plantation. In fact a host of plantation companies mushroomed in the 1990s, luring the public to invest with them. In a typical plantation scheme, the company invited people to invest money in ‘teak-units’ and assured them of a specified quantum of teak (or cash) as returns after a specified lock-in period, which was usually very long. Typically, an investment of Rs 1,275 in a teak tree was to fetch Rs 62,000 or 37.5 cubic feet of teak at the expiry of 20 years. There were slight variations in the offers made by different teak plantation companies.
The MPIDA, introduced in 2000, was meant to protect investors who were being duped by financial establishments offering various schemes with huge returns, without any obligation to refund the same. The Act was enacted at the instance of the RBI, which suggested that the state come up with a legislation as the existing ones were found inadequate to deal with the growing number of such companies. The Act carried a six year-imprisonment on conviction and a fine of Rs 1 lakh.
Police officials say there have been only six convictions before the Act was struck down by the Bombay high court in 2005. In other cases, the chargesheets have been submitted but the trials could not proceed since the Act was struck down.
Police officials said that the public ought to be careful while investing in companies that offer exceptionally huge returns. “It’s greed and easy money that makes people fall for these schemes. They do not realise that it is not a viable business proposition.’’
The state government has now decided to set up units of the Economic Offences Wing in the districts too considering that several ponzi schemes are proliferating there. It is estimated that the amount involved in recent cases being handled by the EOW adds up to over Rs 600 crore.
.jpeg)
.jpeg)
Comments
Post a Comment